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Author : Bitcoins Basics 101 PDF Ebook by DAVID DODGE and BRIAN DIXON
We're going to go over some of the main ones so that you have a better idea of how it's spread so far so fast. It's Useful - First, you have to look at the fact that Bitcoin is useful. It manages to fulfill a need for many people around the world. Decentralized - The fact that the Bitcoin network is not controlled by a single person or corporation has helped it gain favor with the world's population. It's Easy - Another reason Bitcoin has become so popular is that it's relatively easy to set-up and understand. Within 5 minutes most people can have a Bitcoin Wallet installed and connected to the network. Convenient - Additionally, once you have your Bitcoin Client setup and connected to the network, it's amazingly convenient to transfer money. Barriers Removed - One of the biggest reasons that Bitcoin has caught on and become insanely popular is that it works to remove barriers that cause people problems. As you can see, Bitcoin is popular for many of the same reasons physical currency is popular around the world. It makes modern life possible and a little bit easier. What is The Value Of Bitcoin. We're now going to take a look at the true value of bitcoins. All that is needed for currency to hold value is trust in the currency and people using it. This is one of the main reasons that bitcoins now have value. It has been accepted as being valuable by a large group of people, both buyers and merchants. A lot of people around the world now accept Bitcoin as a means of payment.
Additionally, the fact that Bitcoin has spawned so many startup companies around the world is testament to bitcoins having value. Having said that, Bitcoin is like any other currency. That is to say that their value is measured in part by what people believe they're worth. The single biggest thing to remember is that if they weren't accepted as payment they would have no intrinsic value. In the past, many currencies were backed by physical assets - typically gold and other precious metals. Because they're rare around the heavier elements have value. This value was passed on to bits of paper and metal coins to make it easier to transfer wealth from one person to another. Over time, a lot of governments switched to fiat currency, which is NOT backed by precious metals. This is why countries can simply print money to stimulate the income. However, doing so causes inflation and the money ends up being worthless. Because Bitcoin is not backed by physical assets and its creation is decentralized, its value relies on the confidence people have in the virtual cryptocurrency. At first bitcoins had no value at all. Then, gradually, as more people became involved and began to give them value, their overall value increased. It's important to note that the value of a Bitcoin will vary from exchange to exchange, showing that the value really is what people are willing to spend on it. If you know anything about the history of finance, you've probably heard the story of the Dutch Tulip Market. In the country, tulip bulbs were rare and had value.
Over time, they became more and more valuable as the market was worked into a frenzy. The price skyrocketed until people started getting scared and sold all of their tulips. As this happened, the prices plummeted until they were back to "normal" for the most part. Unfortunately, the same thing could conceivably happen with the value of a Bitcoin. During 2012 and 2013, the value of 1 BTC rose quite a bit, with each Bitcoin being worth several hundred dollars. The value drops occasionally, but it's still trending upward, becoming more and more valuable as time passes and the 21 million Bitcoin limit nears. Let's take a look at some of the main reasons that the value of a Bitcoin has been increasing and will likely continue to increase in value in the years ahead. 1. Major Investors - One of the main things that has helped the value of bitcoins to increase so much recently is the fact that a lot of "deep pocket" investors have begun to take notice of Bitcoin and its potential for making a profit. Some companies have made very large purchases of bitcoins, betting that they're going to increase in value. This only leads to Bitcoin becoming even more popular and valuable, of course. 2. BTC China - Another thing to look at is the birth and rise of BTC China - now the largest Bitcoin Exchange in the world. As many Chinese try to find ways to safely invest their money, Bitcoin has become a way to get around regulations in that country. This surge in popularity led to BTC China being set up. After launching, it quickly became responsible for most of the Bitcoin transactions worldwide.
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