In one minute
- Store of value (SoV): An asset people hold to preserve purchasing power over time. Classic examples include gold and high-grade bonds.
- Why some see BTC as SoV: Fixed long-term supply (21 million), predictable issuance, global portability, and easy self-custody.
- Why others disagree: High price volatility, changing regulations, and the fact that BTC is still relatively young compared to traditional stores of value.
Educational only - not financial advice. Crypto is risky. Never share your seed phrase. Start with tiny tests.
Properties of money (lite checklist)
Scarcity
Bitcoin's supply is capped and new issuance declines on a schedule. Scarcity is enforced by code and the network's consensus rules.
Durability & portability
BTC is digital; you can back up keys anywhere and move value globally in minutes (fees and confirmations apply).
Divisibility
Each BTC splits into 100,000,000 satoshis ("sats"), enabling tiny transfers and flexible pricing.
Recognizability
Nodes verify authenticity by rules; no need for assay labs as with physical gold.
Fungibility
Coins are designed to be interchangeable, though on-chain history can affect how some services view specific UTXOs.
Stability (the catch)
BTC's purchasing power has swung widely historically; that is a tension with "store of value." Time horizon matters.
Store of value vs spending money
BTC as SoV
- Thesis: A predictable, scarce digital asset may hold value over long periods if adoption keeps growing.
- Behavior: Many holders keep BTC in cold storage, seldom moving it except for rebalancing.
- Analogy: Similar to gold bars in a vault - not used for coffee purchases.
BTC as currency
- Medium of exchange: You can pay directly on Bitcoin or via layers that speed up and lower costs.
- Reality today: Usage for everyday retail is smaller than SoV/speculation; fees and volatility can discourage small purchases during busy times.
- Trade-off: The more it is used as daily money, the more UX and fee considerations matter.
Many users separate "saving" BTC from "spending" in other assets or via low-fee layers, depending on needs.
Issuance & supply (plain English)
- Fixed cap: The total BTC that will ever exist is limited by protocol rules.
- Predictable issuance: New coins are introduced on a schedule that decreases over time, making BTC more scarce as years pass.
- No central issuer: Rules change only if a supermajority of the network adopts them; users can reject changes by running their preferred node software.
Predictability does not guarantee price stability; it sets supply. Markets handle demand.
Volatility: what it means for you
- Upside and downside: Prices can move dramatically in short periods. This can be stressful for near-term needs.
- Time horizon: People who view BTC as SoV often think in years, not days; still, past performance does not predict the future.
- Practical tip: Avoid putting funds you cannot afford to have fluctuate into highly volatile assets.
Custody choices (if holding for the long term)
Self-custody
- Use a hardware wallet or secure setup to hold your own keys.
- Back up your seed phrase (and passphrase, if used) offline; test a restore.
- Consider multisig for large balances (separate devices and locations).
Custodial accounts
- A third party holds keys for you; easier UX but you trust the provider.
- Understand terms, withdrawal limits, and any insurance policies.
- Diversify custody approaches to reduce single-point risks.
See also: Wallets & keys.
Spending vs saving: simple scenarios
Saving for years
Long-term holders often favor cold storage and infrequent moves. They track backups and avoid signing random transactions.
Moving value internationally
BTC can transfer across borders without banks. Fees and confirmation times apply; test with a small amount first.
Everyday payments
Smaller in practice; fees and volatility matter. Some prefer stablecoins for pricing or other payment rails for daily spend.
Main risks & trade-offs
- Market risk: Large price swings; drawdowns can be deep.
- Operational risk: Seed loss, phishing, malware, sending to wrong addresses.
- Protocol/infra risk: Bugs are rare but possible; reliance on specific wallets or explorers can fail.
- Regulatory changes: Rules differ by region and can affect access, taxes, and services.
- Liquidity/fees: During busy periods, fees rise; plan timing and keep some BTC for fees.
- Narrative dependence: The SoV thesis assumes continued adoption and network security.
Mitigations: secure custody, small test transactions, verified addresses, diversified risks, and learning the basics before moving large amounts.
Myths vs reality
- "Bitcoin is anonymous." On-chain data is public; addresses can be analyzed. Privacy needs extra steps and tools. See Privacy coins.
- "Fees are always high." Fees vary with demand and transaction type. Planning and batching can help. See Gas & fees.
- "If it is scarce, price must rise." Scarcity is one factor; demand, liquidity, and macro conditions also matter.
Simple checklists
Before long-term holding
- Hardware wallet set up and verified from an official source?
- Seed (and passphrase if used) written down, tested, and stored safely?
- Multisig or redundancy for larger amounts considered?
- Phishing awareness: bookmarks for official sites; no seed in cloud or screenshots.
Before moving BTC
- Correct network and address format confirmed?
- Test transaction sent first (tiny amount)?
- Enough BTC left for fees after the transfer?
- Recipient can self-verify on a block explorer?
This site is educational. Consider your own situation and local rules.
Quick glossary
- Store of value (SoV): Asset people hold to preserve purchasing power over time.
- Satoshi (sat): 0.00000001 BTC — the smallest unit.
- UTXO: "Coin" units in Bitcoin's model; spent all at once when used.
- Cold storage: Keeping keys offline (for example, a hardware wallet) for security.
- Confirmation: A new block added after your transaction; more = stronger finality.