I've heard a lot about the potential of Bitcoin as a store of value. Can someone explain how its scarcity and decentralized nature contribute to its value proposition?
I hope this brings more understanding to y'all as it will to myself... thank y'all for the reply so far... corrections made already and I await more of your thoughts and replies about this !
Yeah, in crypto space, you will get to listen a lot about BTC is a store of Value Or BTC is a hedge against inflation etc. The back story for both is same. Which is scarcity and decentralization of it. I could extend it to other factors too but you specifically mentioned these two so i am going to make it on these two factors only.
1. Scarcity: means limited supply which means, BTC in compared to Gold has limited supply which means with time the demand of the BTC will exceed supply thus Price of BTC will increase.
2. Decentralization: Unlike Gold, BTC is not controlled by some or group of entities. You must be thinking how gold is managed by single entity. It's not but tracked, processed by single or group of governments. Point is, Gold's supply could be restricted but BTC shops will be open always.
When the value will increase due to scarcity and demand will increase due to decentralization factor, The price will be increasing too. Not to mentioned halving process which is the main player of whole game. Which assure the price to move up with time.