Who decides the value of Bitcoin?
The value of bitcoin is determined, as with most other currencies, by market supply and demand. This means that if many people want to buy bitcoin, but few are willing to sell, the price tends to rise, and vice versa.
How can Bitcoin have value?
Bitcoin has value simply because there is demand for it, and the value of a bitcoin depends directly on the level of that demand. This demand exists because of bitcoin's characteristics, e.g. it can be transferred quickly from anywhere, converted into any currency and tends to appreciate over time.
Sound expensive? Don't worry, it's possible to buy just a fraction of a bitcoin. The smallest unit is called a satoshi, and at the current exchange rate (November 2024), 1 satoshi is worth less than one euro.
Why is Bitcoin so expensive?
In total, there will only be 21 million bitcoins. So the limited supply combined with high demand means that the price is high. Currently, the total value of all bitcoins is approximately 1.7 trillion euros, which is only about 10% the value of all the gold in existence. However, it's important to remember that you don't need to buy a whole bitcoin. Bitcoin is divisible to 8 decimal places, with the smallest unit, 0.00000001 bitcoin, being called 1 satoshi.
