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The Value of Bitcoin

Currencies / Bitcoin Jul 11, 2018 - 03:38 PM GMT

By: Submissions

Currencies In a world that is looking for alternative forms of currency due to heavy regulations and red tape installed in the current transaction systems of the economy, cryptocurrency is presented as a formidable option to traditional forms of currency. Cryptocurrency began as a craze for digital currency that is unbound by many laws and regulations. With cryptocurrency, few questions are asked when making or receiving payments which makes it very attractive.




The greatest breakthrough in cryptocurrency has been Bitcoin; among other forms of cryptocurrency, it has been the one that has created a lot of fuss and anticipation. Most countries are accepting the new form of currency as they begin to formulate new forms of regulations to incorporate some form of accountability. Most countries have accepted the Bitcoin as a new form of digital currency. Others, however, still deem it illegal and hence go to limits to ban it. Such nations include:

  • Algeria
  • Bolivia
  • Nepal
  • Bangladesh
  • Cambodia
  • Ecuador

What is Bitcoin?

Bitcoin is a form of digital money created to facilitate a consensus network where two people can agree to transact in digital money after completion of the sale of goods and services. Bitcoin runs on blockchain technology which is a digital ledger of economic transactions. The ledger is incorruptible and can be programmed to record anything of value apart from financial currency. Even though the technology was developed for Bitcoin, its inability to be corrupted has given it value for other forms of transactions that are non-financial.

But as time moves, Bitcoin isn't looking as secure as it was imagined. Bitcoin exchange agencies are the bodies holding client assets in the form of bitcoins and have lately been the subject of losses due to hacking. The exchange agencies work in the place of banks as most countries are still formulating regulations for the new cryptocurrency. An analysis conducted on the subject shows that about 10% of Bitcoins in supply are stolen by hackers; something that may affect the value of Bitcoins.

Financial Value of Bitcoins

Cryptocurrency was created under the guise that it presented a form of currency that was not subjected to regulations. The phenomenon gave Bitcoin a higher value in the financial market but as countries legalise Bitcoins through tentative laws and seek to regulate the currency, it threatens to deplete the value of the currency. Despite the threat, it may not be credible as regulations introduce some form of transparency in a field that is filled with some chaos. Transparency is the only legit way through which Bitcoin can leave the virtual economy and be accepted in the real economy.

On the contrary, the value of Bitcoin or cryptocurrency as a whole is based on the volatility which is influenced by a market that is trying to figure out how much financial freedom is worth especially for countries or governments that seem oppressive to the economy.

Sectors using Bitcoin

On the basis of financial freedom, Bitcoin is used in many sectors that are heavily regulated in the real economy. These include entities such as online betting platforms and Bitcoin casinos online. With such entities not having to be subjected to regulations because of using cryptocurrency, clients and business owners get to earn big. Most casinos issue about 97% payout to their clients and remain with 3% as commission also attracts a whole new level of volatility in the sector.

While the future remains promising for an enabling technology like blockchain, success for Bitcoin will depend on the framework decided upon by lawmakers.

By Dylan M.

© 2018 Copyright Dylan M. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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