Can bitcoin become worthless?

Bitcoin is a digital currency that was created in 2009 by Satoshi Nakamoto.

Bitcoin is not just for speculators anymore. As of today, bitcoin has been accepted as a legitimate form of currency by many retailers and online stores. A lot of people are investing in bitcoin because they see it as an innovative business investment with potential widespread use beyond the currency realm. So, should you invest? Will bitcoin become worthless? In this article, we'll examine what makes Bitcoin valuable and when will it be worth zero.

What makes Bitcoin valuable?

Bitcoin is a decentralized type of money; as a result, it is not issued by any central authority and instead exists within a peer-to-peer network. Bitcoins also have no physical form and exist only as digital files. This means that they are immune to seizure by law enforcement or destruction in a fire or flood. It is relatively easy to transfer bitcoins from one person to another all over the world as well. There are several reasons why the value of bitcoin is increasing, viz.

Bitcoin offers a lot more anonymity to its users compared to credit cards and PayPal when making payments. This can be an attractive feature for people who wish to purchase illegal stuff online.

The supply of bitcoins is limited, which could lead to a modern day 'gold rush'. The maximum number of bitcoins that will ever be available is 21 million.

The volatility of bitcoins is comparatively low as compared to other forms of investment.

Price predictions for Bitcoin in the future

The value of bitcoins has been increasing consistently over the past few years. For example, one bitcoin was equivalent to about $30 at the beginning of 2013 but by December of that year it had gone up by almost 1000%. The value rose from $1,100 to a maximum price of $1,200 in December 2013 before dropping slightly to a low point on January 14 when one bitcoin was worth $827. This steady growth can be attributed to the strong user base and increasing acceptance of the currency by brick and mortar retailers. Many industry experts are predicting a bright future for bitcoin. Chris Dixon, an investor who has led venture capital investments in companies such as Facebook and Twitter, has predicted that one bitcoin will be worth $1 million some day. There are several other analysts who have given price predictions which range from $400 to $1,500 (approximately Rs. 24000 - Rs. 1 lakh) per bitcoin by 2015.