27

The price of bitcoin is affected by demand and scarcity. Scarcity decreases as more bitcoin are mined (up until the 21 million bitcoin limit is reached---this is the maximum number that can ever be mined), which decreases the price. Scarcity increases as coins are lost (e.g. through the destruction of a wallet), or just held indefinitely (e.g. the ~1 ...


11

Assume for a second that we found a proof of work algorithm that had all of the good properties of sha256, but was also useful for SETI and maintaining world peace. Now suppose a group of miners collectively have more than 51% of the hashing power. In which of the following scenarios are they more likely to collude to double spend via a 51% attack: A) When ...


9

Most websites offering online wallets store your bitcoins against their own private key (giving them control over them), and provide you with tools to spend the bitcoins. While you don't have the private key, this means you don't really have bitcoins any more; instead, you have bitcoin-credits through the specific business you're dealing with. When such a ...


5

Adding to my answer on What are some of the proposed ideas to why the Bitcoin dropped to sub $400 in the end of summer 2014?, which I think is still mostly accurate: Bitstamp loot There are about 19k bitcoins held by the hacker that raided Bitstamp. While, as far as I know, they haven't found their way back into the market, it is an amount that would ...


4

The Chinese are intense savers and frugal. Their interest in Bitcoin will involve relatively small price corrections. Do you want to say the will be resistent to price drops (in the bubbles for example)? Yes. Bubbles will still happen, but the correction would be less severe because Chinese investors tend to buy-and-hold through the ups and ...


4

The best way to derive the possible value is by looking at market cap of bitcoin as a whole. There is currently about 1.2 trillion in USDs in physical currency alone. There are many ways to count how much USD there is though. M1 represents all of the currency in the M0 money supply, plus all of the money held in checking accounts and other checkable ...


4

I like this question1 - we don't get many big picture questions. How could Bitcoin change the world? A mature digital cryptocurrency could reduce trade barriers and thus increase the rate of productivity dispersion throughout society. As money is a form of fungible authenticated information2, non-proprietary digital money gets to take advantage of the ...


3

Lets tackle them one by one: 1) Is this definition true? Not entirely. Stable coin need not be pegged only to fiat currencies. We can also peg a stable coin to exchange traded commodities like precious metals whose price remain fairly stable. You can also have stable coins linked to cryptocurrencies via smart contracts. (2) And if yes, Is it possible to ...


3

1) I don't know anyone actively uses Bitcoin, or other altcoin, that is not mining it and/or trying to profit from it. 2) Bit coin price fluctuates, so as a business I would only use it to process a transaction and then convert it to cash ASAP. 3) Why is everyone losing Bitcoin in the news? True cash gets lost or stolen, but this make me fearful that my ...


3

This is a great question and it's something I spend a lot of time thinking about. In general, I'd say no one really knows at this point and it is difficult to make more than a few guesses. So let me have a try at that: Banks would lose much of their ability to control the monetary supply, interest rates and exchange rate. The financial sector would shrink ...


3

Is there a similar process for making bitcoin tokens Colored Coins: Most of the tokens use OP_RETURN but it's not required Example: BSQ used in Bisq DAO and DEX Omni layer: This project used fake bitcoin addresses, multisig and OP_RETURN to solve the problem. It was used by USDT token for long time until fees on Bitcoin became an issue. https://github....


2

If you made the computation "useful" in some other sense, then in principle you could just sell that "useful" output, and thereby decrease the net economic expenditure securing the blockchain, making it less secured. So bitcoin's "useless" computation is useful, whether or not it has another use. I recently answered this question on my blog, more details ...


2

Understanding bitcoin price behavior with the Quantity theory of money M · V = P · Q Money supply times the Velocity of money equals the Price level times the Quantity of goods. Several arguments against the success of Bitcoin are doing the round: Bitcoin is a bubble, the present $1000+ price level bears no relation to the small bitcoin economy. People ...


2

Pretty much the same will happen as with a Halving now: The only thing that changes is how many bitcoins may be created with the Coinbase transaction; except this time it drops to Zero instead of halving. In particular, mining would have to continue in order to validate transactions, although it would then be completely funded by transaction fees. However, ...


2

TL;DR: No idea, and your question's unanswerable in the first place :) Why does a national currency rise or sinks in value? Why do a company's shares do the same? You will never get definite answers for these or your original question unless you manage to get into all the participants' heads to know what they were thinking of. Meanwhile, you can listen to ...


2

Is Bitcoin still an experiment? I don't think so. There's no control, and nobody's made one of those three panel boards. In all seriousness, though, I think Satoshi probably wrote and published Bitcoin because he found it interesting. He may also have done so because it aligned with his political views. Of course, we're speculating on the motives of a guy ...


2

Many other crypto currencies are inspired by bitcoin, but have a goal that differentiates them from bitcoin. For example, litecoin was design to combat the development of ASICs, so that people with regular computer hardware can mine them. Namecoins provide secure key-value pair storage, and devcoins are somehow used to fund open source endeavors. Others just ...


2

The best I found so far is Wikipedia. It is actually quite up to date. https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country


2

Silk road wallet hold 144,000 Bitcoins. It had 1,2B USD in annual volume. This was 2014. Since then darknet markets have flourished. See Measuring the Longitudinal Evolution of the Online Anonymous Marketplace Ecosystem. This is mostly for illegal drug related and other purely criminal activity like payment fraud (stolen credit card). This does not include ...


2

The effect would be to make the remaining bitcoins worth more over time as the others remain unspent, as I understand it.


2

Consumers have little need for vendor-specific coins I am not an economist, but a lot of vendor-specific crypto sounds like Trading Stamps, Coupons, or maybe even Company Scrip. These might be better called "vouchers" or "tokens" than "coins". There are financial incentives for a company to issue such a token: It aids the issuer as a barrier to ...


2

Why is there more than one fast-food service? Why is there more than one internet browser? The competitive altcoin economy encourages other coins to surge with better implementations. Bitcoin has very high transaction fees as of early 2018, this is why a fork came off as Bitcoin Cash a few months ago, but Bitcoin Cash is not the only coin fighting for low ...


2

Inflation is increase in price without increase in utility. A car with similar features helps you get from point A to point B just like it did one year ago (same utility). However, the cost of the car increased by 2x one year later (higher price) indicating that the currency in which the price has been quoted has been reduced to 0.5x versus its value last ...


2

The "current Bitcoin price" from an exchange like Coinbase is simply the last price at which a buyer and seller agreed to trade Bitcoin at that exchange, also known as the "last price". Every time a new trade takes place on that exchange, the price is updated. The current price from sites that aren't exchanges themselves, like Robinhood ...


1

Why does noone use the exact same technology of the Bitcoin and create Bitcoin 2? They have, there are hundreds of copies of bitcoin known as "altcoins", one prime example is bcash. If they did, why would a Bitcoin2 be worth less than a Bitcoin? Because there is no demand for a bitcoin2. No one wants one because its not a real bitcoin. The only value ...


1

You can go back and check your credit card records for the purchase. That should at least give you a name of a company. Contact that company (if they still exist), and see if they can give you access (assuming you lost your credentials). If they can, and they were storing your bitcoin for you, then you can transfer it to a wallet you control. If you ...


1

There is not black and white answer here I guess, but here is my logic. Let's say that trust is a proxy of security and stability and satisfaction is a proxy of liquidity, usability etc. If we look at the extremes: if people had 100% trust in the USD, then they are less likely to look elsewhere for alternatives (holding everything else constant). Therefore ...


1

Bitcoin’s price has crashed. There is simply no other way to describe the -40% price decline that occurred in the first two weeks of 2015. It’s dismal, it’s disappointing and it’s a normal part of a free and open market. While Bitcoin is a transformative technology, it is not immune to the greed and fear that permeate every financial market. ...


1

Blocks can still be found by miners even if there are no (other) transactions. The reason for this is each block must contain a coinbase transaction, which rewards the miner with 10 coins. (The above is assuming that your coin is sufficiently similar to something like Bitcoin or Litecoin. An altcoin you create could have completely different rules.) As for ...


1

It's been estimated (with many assumptions) to be somewhere around 1-4% of the total trade volume. This seems bad until you learn that the speculation market for USD is $5 trillion a day.


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