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The coin was first established in 2009 by the anonymous creator “Satoshi Nakorumura”. His famous white paper was released on January 3rd, 2009, and so began the crypto revolution. Satoshi’s original design was for bitcoin to be a digital, decentralized currency. What it ends up being is Gold 2.0. For those that are not familiar, gold has been around and valued for thousands of years. It has been used as an investment tool to hedge against inflation as the price of gold goes up as it becomes more scarce counteracting the inflationary aspects of money. Bitcoin does everything gold does except better.
Bitcoin’s value is purely based on whether other people give it value. A lot of Bitcoin haters will say this is why you should never buy it as there isn’t any inherent value. The counter to this is the entire monetary system. Money is a necessary evil, created so that society can function. It is a piece of paper with no inherent value except for the value we as a society give it. Bitcoin operates the same way. It works well as a store of value because other people believe it to be a store of value. An important concept to apply to Bitcoin is Metcalf’s law. Metcalf’s law is defined as “the value of a communications network is proportional to the square of the number of its users.” In this instance, money is the communications network or put in modern terms, social network. Essentially, as more people buy into Bitcoin, its intrinsic value is exponential, drawing in more people. It started out with early adopters, predominantly retail investors.
The market is beginning to shift in 2021 though. As of writing February 9th, 2021, 3 major companies have invested in Bitcoin; Square, MicroStrategy and now Tesla. Tesla being a fortune 500 company and run by the richest man in the world, Elon Musk, has drawn enormous headlines to Bitcoin. This marks the beginning of the widespread adoption of Bitcoin. I predict many other large conglomerates to begin using Bitcoin as a store of value, with Bitcoin being over 100K at the end of the year, potentially even 300K depending on how fast the adoption moves. Time will tell but it’s safe to say that Bitcoin is the new gold.