Why Bitcoin gains value?

You need to know what this chart is. The supply of Bitcoin is an exponentially decreased process. Every 4 years the amount of Bitcoin generated in every 10minutes get halved. That means, with equal amount of effort, you will make twice as less Bitcoin now than you could four years ago. This is one of the fundamentals of deflationary economics or Kynesian economics which is quite the opposite of the inflationary modern economic world that we live in. It’s the chart about supply and demand. Why is Gold or any asset like a house in real estate become more valuable over time, where as on the other hand, my 2000$ 1997 Nissan Sentra is pretty much 0$ in 2019 and prolly will cost me money instead to throw it to junk yard. So, in brief, some stuff in our economy gain value, and some stuff lose value like your clothes, every electronic or home appliances you buy.. the moment you buy, you just crush its value. But things like stocks, lands, bonds can gain value.. not guaranteed, but they do based on economic dynamics. But a crucial reason behind value gains are the characteristics of rarity. If something is precious, and demanded by more people but the supply is controlled, then based on the demand, that will gain value. Now “why will demand of something rise?”- that question depends on the real world utility, innovation factor, excitement factor etc. Every time you ask this question, just simply close your eyes and realize that there were no internet, no facebook before 1990s, and why on Earth are you interested in Facebook, late alone reading this article on your favorite browser.. may be.. may be you will find your own favorite answer for such questions. However, whenever we are talking about value gains in future, there will always be “speculation” involved. But realize that you always speculate about future.. are you not speculating that tomorrow will be good? How do you know that it will be good? May be you have an exam and you know that it will be stressful. So, ultimately, you have some indicator in your mind, in the market to tell why you can speculate on something and why you can not. So, now if you can understand the principal that I am talking about and can understand the chart and if, only if, Bitcoin and other crypto currency continue to hold their promise of being the digital gold and drive the innovation for the future, you know.. how the chart will tend to look like in future. And I hope you can tip me in future for telling you now.



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