Bitcoin is a digital currency. It usually makes the news every day. It's not backed by a government or banking institution, so it can be hard to understand why it is valuable. But there are reasons people think it's valuable.
So, what is the main reason behind it?
Bitcoins are the same as other things. People want them so they can buy stuff. Like money, bitcoins follow the rules of supply and demand. If people want bitcoins, then it is worth something and can be used to trade for anything you want.
No central authentication
While some currencies are backed by the government, others like gold are valuable in and of themselves. But not all currencies work like bitcoin. Bitcoin is not accepted everywhere and it is hard to buy things with money. But the money can still be used as a store of value or to get goods and services that you want.
Bitcoin is a new kind of money. People use it because it is based on computers and not paper like regular money. Some people like it more than regular money because they can send bitcoins to each other without having to pay for anything, and they can send them across the world with no time difference.
Bitcoin is valuable because its supply is limited. People want it more when the supply gets smaller. The more people want bitcoin, the more it goes up in value.
There is a limit on how many bitcoins will be made. If anyone wants to create a new bitcoin, it's will not be possible because of the Bitcoin mining requirements. Bitcoin analyzer thinks that this is the main reason to become the most valuable currency in the world. This means that the price can't go down if there are more people who want to buy it, because there won't be any left to sell them too. Bitcoin also cannot be censored by other payment networks.
For example, if someone tried to buy something with a credit card, the payment network could block the transaction if it wasn't allowed. Bitcoin transactions cannot be blocked by anyone else, so they can happen anywhere and anytime.
But Bitcoin does not have enough use. People don't use it for buying things. The main thing that makes Bitcoin important is that it is scarce. It's like gold because gold is limited to being rare too.