Bitcoin has several characteristics that make it a great form of money.
- Scarcity. By design, there will only be 21 million bitcoins, ever. If you own, say, 1% of all bitcoins today (210,000 bitcoins), you will still own 1% of all bitcoins in a hundred years from now. The same can’t be said of the US dollar, since the government continually grows the money supply through inflation. A dollar today is worth 90% less than a dollar in 1920!
- Portability. Traveling with $1 million dollars of bitcoin on your phone is just as easy as traveling with $15 of bitcoin. The same can’t be said about sacks of US dollars or heavy bars of gold.
- Divisibility. A single bitcoin can be divided into units of 100 million! If a single bitcoin was worth $1 million, you could still send somebody one cent of value in bitcoin.
- Impossible to counterfeit. It is mathematically impossible to counterfeit a bitcoin. When your wallet confirms that you have received some bitcoin, you can be sure you’ve received that bitcoin.
- Sovereign. Most important of all — nobody in the world owns or controls Bitcoin. It is a technology that exists on the internet, just like email. You don’t have to ask permission to own and use Bitcoin, and nobody can stop you. A bank can freeze your dollars, but nobody can freeze your bitcoin!
Now for the question on everyone’s mind, what’s bitcoin worth? →