What Is Bitcoin's Function as a Store of Value?

Bitcoin is the pioneering decentralized digital currency that operates on a peer-to-peer basis. A key aspect of its role is serving as a decentralized store of value, which grants ownership rights similar to those of a physical asset or a unit of account. However, the effectiveness of this store-of-value function has sparked debate. Many cryptocurrency enthusiasts and economists argue that widespread adoption of Bitcoin could usher in a new financial era where transaction amounts are expressed in smaller denominations.

The smallest denomination of Bitcoin, known as Satoshis (or Sats for short), is equal to 0.00000001 BTC, named after its pseudonymous creator. Currently, 1 Satoshi is worth approximately $0.00048.

For many, Bitcoin is viewed as a store of value, akin to gold, rather than as a traditional currency. This perspective suggests that many individuals prefer to purchase Bitcoin and hold it for the long term (a practice often referred to as HODLing) instead of using it for everyday transactions like one would with a dollar, effectively treating it as digital gold.