Why does Bitcoin have value and how is Bitcoin value calculated? Read this article and discover everything you need to know!
A lot of people wonder how the price of Bitcoins is determined. If you are one of those people, you have come to the right place, as we are going to explain everything you need to know about Bitcoin value.
First of all, it is important to remember that Bitcoin works no different than it would with other objects or currencies. The value of Bitcoin is perceived regard for its usefulness and benefits. Please keep in mind that the term value can’t be confused with a price. Bitcoin price is the monetary cost of an actual Bitcoin. The value and the usefulness of Bitcoin is a result of different aspects such as its features, its network, and its innovation.
In order to know how is Bitcoin value calculated, you should first know what determines its value.
- Technological Value – Bitcoin is like BitTorrent, it cannot be shut down as it is censorship-resistant. Being a censorship-resistant substitute for official payment systems and currency makes Bitcoin a disruptive technology.
- Scientific Value – The Bitcoin innovation is important for having solved two general problems – the dilemma of digital double-spending is finally achieved and the blockchain is controlled by the peer-to-peer knots that actually popular the Bitcoin network.
- Social Value – Each Bitcoin purchaser and current user controls and maintains their own money. In other words, the user is solely responsible for its usage and security. No third party such as a centralized issuer or a bank needs to be trusted to hold or maintain your personal Bitcoin wealth. This benefit of Bitcoin eliminates the risks related to trusting external authorities.
- Secured Value – Bitcoin utilizes public-private key pairs to keep the transactions safe and secure. A Bitcoin address is a public key received from a private key held in the Bitcoin wallet of the user. A Bitcoin transaction intended for an address received by the Bitcoin wallet is signed directly with the public key of that address and can be spent or unlocked with the matching key. In other words, the Bitcoin transactions are secured against hacking and theft.
We have noticed that Bitcoin value can’t be reduced to one feature or element. A lot of factors and aspects of the cryptocurrency affect its usefulness and provide advantages that outweigh paper money.
— Einstein Exchange (@EinsteinXchange) 11 de diciembre de 2017
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