In order to use Bitcoin, you first need to install a Bitcoin wallet on your mobile phone or computer. A wallet is a piece of software that manages Bitcoin private keys and allows you to send and receive Bitcoin. When you set up a Bitcoin wallet, you will have your own Bitcoin address which you can share with your friends and others with whom you want to transact. You can have as many Bitcoin addresses as you like.
Once you have some BTC, you can trade it on a cryptocurrency exchange, send it to your friends or use it to buy goods from stores that accept Bitcoin. Alternatively, you could just hold it for a long period of time and hope that it becomes more valuable in the future.
Just like any other tradeable asset, the price of Bitcoin is based on supply and demand. These dynamics can sometimes be unpredictable, and it’s impossible to list all the factors that contribute to Bitcoin price movements.
However, we can list some properties of Bitcoin that lead people to assign value to BTC. Bitcoin can be sent across the globe on a 24/7 basis and is not controlled by any intermediaries. Transactions can’t be censored, and the network is highly secure thanks to the massive amount of computing power that’s backing it.
Many people who invest in Bitcoin also appreciate the fact that Bitcoin has a limited supply of 21 million coins and a predictable monetary policy. New BTC coins cannot be created at will – we know exactly how many BTC will be in circulation at any point in the future.
These properties make Bitcoin a viable candidate for a store of value asset that serves a similar purpose to gold. Investors sometimes refer to Bitcoin as a deflationary currency to highlight the differences between BTC and fiat currencies.