What Is A Bitcoin Worth? The Perfect Money (2024)

Welcome! When you first start investing in Bitcoin, one of the most common things you’ll see is the current BTC/USD exchange rate. It’s huge and only getting more every day so many look at it and rightfully wonder why a single bitcoin is worth such a huge sum of filthy fiat money.

>> Bitcoin Calculator: Easily Convert Bitcoin (BTC) To US Dollar (USD) & More!

Most blindly accept that a bitcoin is worth what it’s worth and move on, but if you’re considering Investing in Bitcoin long term it’s important you truly understand why Bitcoin (both the network and the coin) is valuable. This is because if you don’t, you’ll have lettuce hands and sell the next time bitcoin takes even the slightest tumble, as it’s prone to do.

Understanding the fundamentals of Bitcoin is something all investors should do not just so they are fully aware of what they’re investing their hard earned money in, but so they don’t get fooled into selling when they shouldn’t.

What Is A Bitcoin Worth?

Everything we trade or invest in – cars, computers, art – has a value or worth attached to it. However when someone asks “what’s it worth?” it’s a subjective question. Everyone will have a different opinion and so to try and narrow those opinions down a bit we create specifications, things that make it more valuable than others of its type. A fast computer is worth more than a slow computer for example. This is how it’s been throughout the entire History Of Investing.

Now imagine a world where there is literally only one type of computer and nothing else. You walk into the computer shop, don’t even look at its specifications and buy it. Would you be happy with that? Unlikely. So why do we accept this with our money? It’s one of the most important technologist humans have! Yet we just use the same thing we’ve always used!

Now what if that computer – the only computer there is – hasn’t even been upgraded in decades? Just makes things even worse. As consumers we want different choices, fast ones, slow ones, cheap ones, pretty ones and more. Money – like a computer – is just a tool. A technology that we humans have invented and improved upon over the years and one that enables us to be more productive and effective at what we ultimately want to do.

Usually most people look at all their options when buying a product, but when it comes to money things can get a bit muddy as most of us never really think about the technology of money. While we might go buy a computer and look at its specs, compare how much RAM it has, the resolution of its screen few of us have ever really done this analysis to money which is a shame.

So to properly calculate a fair worth or value for a bitcoin, let’s define some specifications first.

Why Does Money Have Value?

Thanks to history, the specs of what makes for the best money has already been quite well defined. To illustrate this it’s best to reflect briefly on the more “legacy” monies. You’ve got your fiat money (US Dollars, Euro, Great British Pound) and then even older monies like gold, oil or even cows. Why would anyone toil all day only to have their reward be some Euro’s?

The answer is because the Euro’s can be easily transported, stored and used to buy any number of other goods and services at a later time or that they don’t have the skill to do themselves. It’s used as a medium of exchange and money generally has six key characteristics (the specs):

• Scarcity: Limited in supply relative to other things
• Durability: Can be used many times and still function, stands the test of time
• Acceptability: Is used and accepted by many other people
• Portability: Easily moved across long distances
• Divisibility: Easy to divide into smaller units to make trading more practical
• Fungibility: One unit is exactly the same as another unit

These characteristics combine with each other to give money three separate dimensions:

• Good Scarcity and Durability combine to make it a good Store Of Value over time
• Good Acceptability and Portability combine to make it a useful Medium Of Exchange across space
• Good Divisibility and Fungibility combine to make it a good Unit Of Account

You can choose anything to be “money” like a rock or a cow. Whether or not it’s considered as a good type of money and then valuable depends on how well it hits all the characteristics and dimensions.

This is no different to how a phone that can record 8K video, surf the web on a big screen and stream Spotify makes for a more valuable smartphone than a brick phone from the 1990’s.

Historically, people have used many different physical items as money such as seashells, tulips or Rai stones, but throughout all of it the most enduring form of money has been gold.

Why Is Bitcoin Valuable?

Now that we understand what makes a “good” money we can use these definitions to compare some of the top monies that have ever been used over time to the new hotness, Bitcoin.

As you can see, it’s a bit of a blood bath!

Gold is durable, fungible and most importantly pretty scarce. It’s not very widely accepted (try paying your taxes or buying a coffee with it), divisible or portable. $1,000,000 in gold weights about 17 kg.

Fiat money such as the USD is accepted far and wide, fungible, relatively durable, portable ($1,000,000 in $100 bills weights about 10 kg) and divisible but has the key flaw of not being scare at all. The fed can and has printed trillions of it.

Then comes Bitcoin. It’s more scarce than even gold (absolute fixed supply of 21 million vs slowly growing supply), infinitely durable, infinitely portable, easily divisible and fungible. The only characteristic it falls down on is acceptability as not everyone accepts it… yet.

• Scarcity: Bitcoin has a fixed supply and is the scarcest monetary asset in the world. There will only ever be 21 million bitcoins as defined by the monetary policy which for all intense and purpose, will never be changed.
• Durability: As Bitcoin Is A Cryptocurrency, it’s entirely digital and never degrades when being used and is thus completely durable. When durability is considered over long periods of time it also has a great advantage. While gold might be physically durable there is only one of it. Bitcoin, while not being particularly tough if in the form of a hardware wallet or the seed phrase being written on a piece of paper, can be made near indestructible because you can copy the seed phrase onto an unlimited number of things. You could etch the seed phrase into diamond, the hardest material in the world or replicate it 1,000 times across the world over, as long as just one of them survives you’ll have access to all your funds.
• Acceptability: Bitcoin is now accepted by a huge array of countries, companies and people. You can do a lot with Bitcoin already, but it still isn’t quite as good as the top fiat currencies like the USD.
• Portability: There is no money that is more portable than bitcoin. You can store any value on a hardware wallet that’s no bigger than a small USB drive making it possible to physically move billions or even trillions with just a few grams of weight. If you really trust your memory (you shouldn’t!), you can even memorize your 12/24 word seed phrase and then no physical equipment of any kind is required. Being purely digital you can also send billions of dollars of it over any distance instantly and with basically no cost.
• Divisibility: Each 1 BTC can be easily divided into 100 million separate pieces (0.00000001 BTC) called “Satoshi” or “Sats”. For comparison most fiat money can only be divided into 100 pieces or a cent (0.01). It doesn’t cost anything to divide a bitcoin up and it’s also just as easy to add any number of these smaller pieces back together again making it very easy to use.
• Fungibility: All bitcoins are the same as each other.

This exceedingly good report card makes Bitcoin highly desirable and thus, valuable in the eyes of many, but it doesn’t stop there. Beyond the six basic characteristics of money Bitcoin has even more benefits:

• Verifiable: While other monies like a $100 bill or chunk of gold can be hard to verify unless you’re a trained expert, bitcoins are not only easy for anyone to verify using a free/cheap Bitcoin Full Node, but the process is entirely automatic and free meaning it can be set as the default for everyone, for every transaction
• Hard To Counterfeit: As every bitcoin is precisely tracked by the Blockchain which is distributed on tens of thousands of enforcing nodes all over the world, counterfeiting one is near impossible as it would be immediately detected and rejected by the entire network. After 15 years, there’s still never been a single double spend on the Bitcoin network
• Censorship Resistant: As Bitcoin doesn’t require any trusted third parties and can be sent and received simply via software that’s run on any computer, it’s incredibly difficult for anyone to “ban” or stop it. To stop a Bitcoin transaction a government effectively has to stop the Internet or go into an individuals home using physical force making it highly resistant to censorship
• Sovereign: The Bitcoin network exists independently of any country, government or company. No one controls, owns or runs it and as such, it is completely sovereign. This makes it far more fair than any other fiat currency
• Decentralized: All Bitcoin transactions are saved to the blockchain (a database if you will). A copy of this blockchain is voluntarily stored on tens of thousands of computers called “nodes” all across the world. With so many copies in so many places (even in space!) it’s one of the most distributed and decentralized networks ever created
• Always Open: Bitcoin, unlike traditional financial markets or banks, never sleeps. You can buy, sell, send or receive it globally, 24/7/365. Due to its distributed nature, it’s virtually impossible for the network to go down and has had 100% up-time since 2013
• Transparent: When you make a transaction with Bitcoin it is added to the blockchain. This ledger is public and viewable to anyone world wide. This allows everyone, everywhere, to always make sure everyone is playing by the rules
• Peer-To-Peer: There are no trusted third parties such as banks or government institutions involved during a Bitcoin transaction. The transaction goes directly from one person to the other. This reduces counterparty risks, decreases fees, speeds things up and greatly increases privacy
• Permissionless: It can be used without having to ask anyone for permission. You don’t need to created an account, sign up to a company or tell anyone who you are to use it. This is extremely important for billions of people who are not allowed or able to register with legacy financial institutions
• Pseudo-Anonymous: You do not need to identify yourself to use Bitcoin. There are no names recorded during a transaction, instead they are tied to an address that is essentially just a bunch of randomly generated letters and numbers. It should be noted that it’s still possible to link these generated addresses to real life names if care is not taken to protect your Bitcoin Privacy
• Protected: The worlds biggest supercomputer, made up of millions of independent and globally distributed networked computers called “miners” protect every Bitcoin. This network hasn’t been hacked since its inception and continues to grow in size every year
• Choice Of Fee: Each Bitcoin transaction usually requires a Transaction Fee (paid in bitcoins) to send it. While most banks or other institutions have set fees that you cannot choose or change, with Bitcoin you get to set the fee for every transaction. The higher the fee, the quicker the transaction will get confirmed by Bitcoin Miners. You can even set a fee of zero and there is a chance it will still be processed when the network use is low. A fee of at least 1 sat/vB is recommended though so the transaction doesn’t get stuck
• Final Settlement: Bitcoin transactions, once confirmed in a block which takes on average 10 minutes, are irreversible and final. They cannot be clawed back via “charge backs” or other parties meaning you can be certain that the bitcoins you receive are truly yours

There are more reasons that people find Bitcoin valuable, but even the ones above are more than enough to distinguish it as one of the most significant inventions in human history. Never before has human kind had such a perfect money available, let alone available to everyone, equally, all over the globe!

How Is Bitcoin Used?

You can buy Bitcoin, sell it, use it to purchase goods and services anywhere in the world and you can also send it to any other address (which can be owned by a person, persons or even code driven Smart Contracts).

You can send a whole Bitcoin (1 BTC) or a small part of it such as 0.0001 BTC (see units below). While some day traders buy and sell Bitcoin on its worldwide, 24/7/365 market to try and speculate, others use Dollar Cost Averaging (DCA) to invest in it long term. It allows anyone to:

• Store monetary value over time. While not immediately different to say, putting your money in a bank account, Bitcoin isn’t inflated away at 2-3% (or 9.1% at the moment!) each year. Instead it has a current inflation rate of 1.68% which reduces every ~4 years in a set way. Simply keeping your money stored throughout time (10 years, 100 years) and it not being siphoned away or debased by taxes / inflation / companies going bankrupt is a major Bitcoin use.
• Store monetary value without anyone’s permission. While this might seem like a trivial thing to be able to do to anyone that has a bank account in a first world country, billions of people in the world cannot get a bank account and thus, can never save their money long term, send it to others or receive it for activities like running a business. With Bitcoin, this is now free for anyone with a smartphone to use forever.
• Store monetary value beyond the reach of a government. For those in first world countries, this isn’t a big concern as currencies like the dollar or the Euro don’t suffer from hyperinflation. For billions more people under authoritarian regimes or double or triple digit inflation this is a critical use. Most of these people have no choice but to use the currency of their country, currencies that are often seized by tyrants, inflated away to nothingness or just declared worthless overnight. Bitcoin gives them a choice and an impenetrable safe storage place for the first time in history.
• Send money overseas instantly and cheaply. If you’ve ever tried to send someone overseas $10 (or even a larger amount) you’ll know how difficult, slow and costly that “simple” exercise can be. It involves multiple banks, currency conversions, fees and intense privacy invasive “checks”. By contrast, with Bitcoin you can send anything from $1 to the aforementioned billions with final settlement occurring in minutes and for cents. For more info, check out our detailed piece How Long Does Bitcoin Take To Send?
• Send free and instant Remittance. Remittance is a multi-billion dollar industry that charges horrendous fees (5%-50%) and takes weeks over the legacy financial rails. With Bitcoin and the Lightning Network remittance can be instant and free for everyone. Being entirely online it also saves people from having to travel for hours every week just to withdraw the money from a physical location where they have a high chance of being robbed.
• Transact without being banned. While you might think of terrorists or drug lords as the only “baddies” being banned by banks, there are many countries where simply being female means you cannot have a bank account. Sex workers (and even those simply discussing sex) are also often banned or demonetized. Bitcoin allows for them to transact and have access once again.
• Take their wealth with them when fleeing a country. Even in Europe, fleeing a war torn country isn’t off the table these days and with Bitcoin you can take any amount of wealth with you either with a Hardware Wallet (basically just a USB drive) or by even just remembering 12 short words.

That’s not all either, there are Layer 2 applications built on top of Bitcoin that enable instant and near free transactions of fractions of a cent enabling creators to charge for their content by the page, second, podcast, video, minute and many other things too.

Things are just starting with Bitcoins adoption currently estimated to be at the same point as the Internet was back in 1999 or so, plus it’s growing at a faster rate too! Over the next decade even newer, more amazing capabilities will emerge just like what happened with the Internet. We cover even more ways you can use Bitcoin in our What Can You Do With Bitcoin?

What Are The Units Of Bitcoin?

Bitcoins have the currency symbol ₿ in front of them and are highly divisible, especially since transactions involving whole Bitcoins are no longer quite so common between people given 1 Bitcoin is now worth tens of thousands of dollars. Bitcoin is decentralized, so there is no official organization or central authority to set official names for units.

As of 2014, the most common units for Bitcoin (abbreviated BTC or XBT) are:

• 1,000,000 BTC = megaBitcoin
• 1,000 BTC = kiloBitcoin
• 10 BTC = decaBitcoin
• 1 BTC = 1 Bitcoin
• 0.01 BTC = 1 cBTC = 1 centiBitcoin (also referred to as bitcent)
• 0.001 BTC = 1 mBTC = 1 milliBitcoin / mbit / millibit / bitmill
• 0.000 001 BTC = 1 μBTC = 1 microBitcoin / ubit / microbit / bits
• 0.000 000 01 = 1 satoshi / sat

The smallest value that the Bitcoin network supports sending is the Satoshi, one hundred-millionth (0.000 000 01) of a Bitcoin. In other words, the network does not support sending fractions of a Satoshi.

Since it is a hard limit, it seems natural to use it as a unit, though it currently has very little value. The plural of Satoshi is Satoshi: “Send me 100 Satoshi”. This base unit is named after the pseudonymous creator(s) of Bitcoin, Satoshi Nakamoto.

Special Note! Be aware that 1 BTC = 100 Million Sats, NOT 1,000 Million Sats! We’re used to things growing in groups of 3 (eg 1 -> 1,000 -> 1,000,000) but Bitcoin only splits into 8 decimal places not 9. So rather than there being 1,000 million there is only 100 million.

This is why some suggest we should move towards the Satcomma Standard  where denominations would be written as ₿1.23,456,789. This allows the user to clearly see that there are 123 million Satoshi while at the same time also seeing that that is equal to 1.23 Bitcoins.

Bitcoin’s Price History

Bitcoin has gone through a number of huge bear and bull markets over its first decade. From gaining almost 3,000% in just three months to loosing almost 40% in one day it has been – and still is! – a wild ride for investors.

The table values below are taken from CoinGecko.com and is reliable for the 2013 period onwards, however in the earlier years of 2009 to 2013, valuations are difficult to pin down given it was an immature market at that point.

The Athena Assessment

Throughout history, virtually all money evolved over large periods of time without anyone really sitting down and designing them (for examples see sea shells or glass beads). Even the fiat currencies we use today have been hap haphazardly cobbled together and altered over a century by bickering nations (all with their own agendas) during the throws of global financial crises or world wars.

As such, none of them were cohesively designed / engineered with a clear goal of bringing the best money possible to all of the world and without any desire to benefit from it like Bitcoin was. None of them were able to use the superior technologies of computers and the internet either.

Because of this, Bitcoin is the scarcest, most durable, most portable, most divisible and most custom engineered money in history. In time, as it progresses through its current stage of being a Store Of Value, then onto being a Medium Of Exchange and finally onto being a Unit Of Account, it will also be the most accepted money too.

These characteristics, together with the many other core benefits such as immutability, privacy, decentralization, sovereignty, permissionless, pseudo-anonymous and its already enormous network effect, seem to indicate that it will soon become the dominate global money for the planet.

We believe this global adoption will happen over the next 10 years or so, likely by 2030 or 2035 at the latest. Given Bitcoins historic growth rate and the already established S curve that it’s following, by 2035 it should be as widely adopted and ingrained into every corner of existence as the internet and computers are now.

What you believe that’s “worth” is only something you can answer.

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