It has become a reality that now people can make huge transactions without any interference from any central monetary regulatory authority or government, thanks to Satoshi Nakamoto (that is a person or a group of persons it is still unclear) who has made this possible through by developing the cryptocurrency known as ‘Bitcoin.’ Once after understanding what exactly Bitcoin is then, comes the Bitcoin price, reading about it is another level euphoria.
Factors That Determine The Price Of Bitcoin
The bitcoin price is equally intriguing as the bitcoin as for those who, for the first time, check the bitcoin price is bound to be shocked. Let us understand the metrics that determine the price of a bitcoin:
- Competition: Irrespective of the fact that bitcoin is dominating the markets and is more trusted by the investors, also being the oldest cryptocurrency, is widespread competition due to new firms entering the field as there is no barrier to entry, and thus, is good news for the investors that the prices of bitcoin are lower but when it comes to selling them, this is a setback.
- Cost of production: this might surprise the readers as they know bitcoin is not really a tangible good and, therefore, do not require any raw material. Well, that is not entirely true. The production cost of Bitcoin mainly includes the cost of electricity, and the mining of bitcoin is based on a cryptographic math problem that miners tend to solve and thus incurs charges; thus, even though not being tangible, it requires a cost to be produced.
- Governance stability: It is known that bitcoin isn’t under the reach of any central governmental authority. Thus, it depends on the miners and developers for transactions and for keeping the blockchain secure and changes to rules about the creation of new cryptocurrency.
Benefits of Using Bitcoin
Numerous benefits can be derived from using, and bitcoin let us go through a few of them:
- User Autonomy: This is why people tend to use bitcoin; the user is enabled to control their spending.
- End to end Encryption: The bitcoin payment system is safe and secure as there is a third party involved in the process of the transaction
- Avoidance of banking fees: The transaction fee in bitcoin is much lesser than in the banking system.
These are a few of the numerous benefits that a person can enjoy from using bitcoin, and there must be no wonder as to the increasing popularity of this system and in the hidden identity of the creators.