What is Bitcoin?
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.1
Who controls Bitcoin?
Nobody controls Bitcoin. Most people are familiar with the local or regional bank. Some maybe even know about the central bank of the United States, the Federal Reserve. But when it comes to Bitcoin there is no central banking system creating or controlling Bitcoin. Participants from all around the world control bitcoin. Unlike, government centrality of money has the Federal Reserve and U.S. Treasury. There is no one or no place of centralization. The users and miners support the Bitcoin system. These participants support the development and maintenance of the system.
Where did originate from?
Bitcoin is the first manifestation of the cryptocurrency concept. Wei Dan, a cypherpunk and computer engineer created the cryptocurrency concept. Wei Dan suggested a new concept of a decentralized (no central banking) form of money using cryptography. The cryptography would manage the creation and transactions of the new form of money.
In 2009, Satoshi Nakamoto delivered in a cryptography mailing the proof. This proof published by Satoshi Nakamoto is the first speculation of the Bitcoin. Satoshi left the space in 2010.
Is Bitcoin printed like paper money?
No, The entire point of the Bitcoin is to avoid the concept of the centralization. The entire concept of bitcoin is zero reliance on a central issuer. Fiat currency is highly controlled. It is printed and distributed under government control.
How is the value of Bitcoin determined in the market?
4 Things determine value
Scarcity is how rare a thing is. People love the rarity of gold. Gold is scarce. Gold has a value.
Utility is a state of being useful. Gold has utility. People use gold for various things.
Supply is how much of a thing is available. If there is plenty of a thing in supply its value is less value. Gold is scarce and its supply is low.
Demand is how desired a thing. If a thing has a low demand its value will be low. Gold has excellent qualities: useful, rare, and is in demand. Gold derives its value from these quantities. Now let us get back to the Bitcoin
Bitcoin resembles gold in that it is scarce. The bitcoin limitation is a known fact. Bitcoin has a maximum 21m market cap. It is useful (utility). You can use bitcoin to make payments or receive payments. Bitcoin is able to perform three things in transactions:
- fungible – replaced by identical term
- divisible – pay someone in a smaller amount
- verifiable – checked out or demonstrated (via the Blockchain)
Bitcoin Price is NOT its Value
Supply and demand affect the price of a thing. The supply and demand of the market determine the price of Bitcoin. The sellers and buyers in the market determine the price of the Bitcoin. The buyer perceives the price of Bitcoin is going to increase in the future they will pay more today.