What is the value of Bitcoin? (What is the true value of Bitcoin?)

What does Bitcoin value depend on? As a new Cryptocurrency, Bitcoin has a high position in value. With the continuous growth of the digital asset market and the widespread application of blockchain technology, its use is becoming increasingly popular Bitcoin prices have been considered a good investment tool from the beginning, but due to its network effects, Bitcoin prices have also become much more unstable. Therefore, in order to evaluate whether Bitcoin is feasible, secure, and the factors required for future market development, in-depth research can be conducted on these issues Let’s take a look at how Bitcoin affects its value

1. Bitcoin is a commodity

Bitcoin has two main types: Scarcity and liquidity (relatively low), anonymity (easy to trade and not controlled by any centralized institution); And they are all implemented through on chain technology. The most anticipated among them is the miners’ reward, which they will receive in order to be able to mine the newly generated mining output Bitcoin and earn profits; At present, there is very little or insufficient data in circulation to prove this

2. Exchange fees

Bitcoin traders need to pay a fixed amount of transaction fee for each transaction.

. This makes the transaction cost lower than other Cryptocurrency, because exchanges charge higher fees, and their transaction costs will increase. But for most people, Bitcoin still carries significant volatility risks. If the exchange handles more trading activities, the total supply of Bitcoin will decrease According to CoinMarketCap data, a total of 1 billion BTCs were mined globally on November 17, 2019. As of the end of 2019, this value was around 83800 BTCs. Although this number is already small, the number of Bitcoin network participants is increasing, reaching 628000 as of the end of December 2020 Why do users purchase Bitcoin Bitcoin is based on blockchain and was proposed by computer science professor Nick Szabo. He believes that the development of Bitcoin is aimed at addressing some pain points in the existing financial system, such as a lack of trust. He also pointed out that Bitcoin’s consensus algorithm should ensure that all nodes must comply with effective legal rules to prevent attacks What is the true value of Bitcoin? Let’s take a look at some of the content in this article

Author: Wang Xiaochuan

Article title: The True Value of Bitcoin, How It Comes From

Copywriter: Sun Ruili, Li Jiaxuan

Produced | The Odaily Planet Daily (ID: o-day)

In the past two years, the Cryptocurrency market has experienced a bull market and a bear market; But by 2020, with the outbreak of the global epidemic and the economic impact of the US COVID-19 blockade and a series of other events, Bitcoin has entered a new stage. Although historical data shows that Bitcoin is still in a low period, from a fundamental perspective, it still has very high potential as an asset worth investing in This article mainly introduces the value of Bitcoin and its sustainability as a payment method

1. What is the source of Bitcoin prices

Since 2009, there have been many technical issues and conceptual debates about blockchain;

; And the answers to these questions are often not very accurate. The price of Bitcoin is driven by people’s demand for it. When you consider the development cycle of Bitcoin itself, you will find that this demand is not that high. Therefore, if a new technology is to be used to solve this problem, there must be other ways to improve its development speed and extend it beyond the entire society

2. How to achieve the programmability and efficiency of the Bitcoin network

For those who want to participate in the Bitcoin ecosystem, the first thing they should understand is that Bitcoin can be used to trade anything, not just Fiat money or financial instruments

3. What is the cost of Bitcoin mining equipment

Nowadays, most people believe that the profits obtained through Bitcoin mining equipment will increasingly come from government departments or individuals.

. However, according to Coinmarketcap data, as of February 25, 2021, Bitcoin’s average daily energy extraction was approximately $1.4 billion. In contrast, Bitcoin’s energy consumption during the same period last year was around 80 megawatts – equivalent to 50 million computer processing power per second (TWH), and even worse, there are more power usage scenarios that need to be developed

4. Where does Bitcoin network fee income come from?

Due to many users not having enough money to make daily purchases of Bitcoin, it is difficult for them to find what they need the most.

. In fact, some ordinary people’s mobile wallets cannot meet their needs, such as Google Pay and other websites where it is almost impossible to see the usage of Bitcoin. Moreover, advertisers on the internet are usually willing to spend a lot of time searching for information to understand Bitcoin applications after transferring users’ funds to the platform. Therefore, in order to make their computers more secure and convenient, some users choose to transfer their cash to bank accounts to obtain cash flow, as these companies provide Bitcoin services on their servers instead of charging fees like some centralized exchanges to promote business operations. In addition, there are also users who wish to use Bitcoin to purchase resources such as books and other artworks or collectibles.