CRYPTOCURRENCY: Bitcoin Price
By: Waqar Hussain
Tags: Cryptocurrencybitcoin, Cryptocurrency, Bitcoin Mining, Bitcoin, Cryptocurrency Investment

Bitcoin is still trading near its all-time high set earlier this month. Its current price is about $34,000, up 77 percent in the last month and 305 percent in the last year.

Bitcoin, which was first introduced in 2009 as a digital currency, was briefly used as a form of digital money on the outskirts of the economy.

It has since gained attention. It’s now almost entirely used as a kind of “digital gold.” That is, a digital commodity that is in short supply.

In response to the threat of COVID-related economic collapse, governments around the world have flooded financial markets with money generated by central banks in order to boost spending and save the economy.

However, increasing the supply of money devalues it, causing people to seek out inflation-resistant assets to invest in. Bitcoin has become a hedge against looming inflation and low returns on other assets in this setting.

What is Bitcoin?

The estimated circulating supply of Bitcoin, the world’s most expensive cryptocurrency by market capitalization, is 18,590,300 bitcoins, with a maximum supply of 21,000,000.

The Bitcoin protocol has a hard-coded cap that cannot be modified. It generates artificial scarcity, ensuring that the value of digital money rises over time.

Whereas central banks can increase the supply of government-issued currencies like the Australian dollar at will, Bitcoin has a set supply that cannot be inflated by political decisions.

Bitcoin is often exchanged on cryptocurrency exchanges online, but it can also be sent, obtained, and stored in “digital wallets” on unique hardware or mobile apps.

But possibly the most revolutionary feature of the Bitcoin network is that it is a blockchain-based digital currency that relies on the work of cryptographers and computer scientists.

A digital blockchain is a “immutable” ledger, meaning that the history of transactions cannot be altered.

A digital currency that is both functional and decentralised;

Bitcoin is a “decentralised” currency. In other words, rather than relying on a central authority like a central bank, it operates across a decentralised peer-to-peer network.

It accomplishes this by enlisting the help of Bitcoin “miners.” This is anybody who chooses to run applications on the blockchain to verify Bitcoin transactions. There are usually people that are really interested in cryptocurrencies.

They are compensated with bitcoins, which are generated at a rate of ten per minute. However, every four years, the reward paid to miners is cut in half.

Satoshi Nakamoto, the network’s founder, programmed this incremental reduction into the network to simulate the method of removing real gold — simpler at first, but harder over time.

Bitcoin miners now receive 6.25 bitcoins for each block they mine, compared to 50 bitcoins in the early days. Since scarcity grows over time, this provides an opportunity to get involved early.

As a result, the price is expected to increase in order to meet demand. However, since potential scarcity is known in advance (at four-year intervals), halving occurrences are usually already factored in.

As a result, major price increases and decreases usually indicate shifting demand conditions, such as an influx of new institutional investors. Bitcoin is becoming increasingly popular among public corporations.

But what role does Bitcoin serve in a culture where people are so invested?

What is the importance of Bitcoin?

There are many potential reasons for why Bitcoin has become so important to so many people.

It’s a “safe” investment.

Buying bitcoins is a way for people to diversify their assets in the face of global uncertainty. Its market value is equal to that of gold, another go-to commodity that shines in times of crisis.

With the planet in chaos due to a global pandemic, an unusual US presidential transition, and global strategic power changes, it’s likely that more people would see gold and Bitcoin as safer alternatives to dollars.

It is linked to privacy-focused ideologies.

Bitcoin (and other cryptocurrencies) are not politically or ideologically neutral. It arose during the internet period, when privacy was a major concern.

Bitcoin’s philosophical and ideological roots can be traced back to the 1990s and early 2000s “cypherpunk” movement.

According to records from online forums, it was proposed as an anonymous digital currency that would enable people to communicate online without being monitored by governments or businesses, providing an option for those who mistrust the Federal central banking system.

Perhaps the increased use of digital surveillance in response to the COVID pandemic has heightened public concerns regarding online privacy and protection, reigniting interest in Bitcoin’s potential.

Why is Bitcoin so popular?

Bitcoin’s recent price increase can be attributed to three factors: ideology, popular opinion, and hope.

However, despite the fact that these are contingent factors, the importance of the digital economy, interest in the technology as it matures, and the influence of institutional investors in cryptocurrencies, like Bitcoin, should not be overlooked.

Bitcoin is in what is known as “bull market” territory, which means it is on the rise.

It was created with the intention of increasing in value over time thanks to the rules Nakamoto incorporated into the software code, which Bitcoin’s most ardent supporters, known as “maximalists,” vehemently defend.

Imagining new possibilities

Decentralised cryptocurrencies, on the other hand, allow for new ways to coordinate without the need for a central arbiter.

Digital money isn’t the only advantage of decentralised blockchain-based networks. Decentralised applications (DApps) are being built on top of Bitcoin and other blockchain protocols by software developers all over the world, much like regular mobile apps.

Other cryptocurrencies, such as Ethereum, have been launched as open networks for the general public.

Decentralised financial (DeFi) resources for prediction markets, cryptocurrency borrowing and lending, saving, and crowd-funding are among the other DApps.

The audacity of Nakamoto’s digital currency gamble is paying off. And now is the time to think about what this means for our digital, physical, and social futures.

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