Bitcoin provides an efficient way to transfer money over the Internet and it’s regulated by a decentralized network with transparent terms, thus presenting an alternative to fiat money controlled by the central bank. There has been a lot of talk about price of bitcoin, and we set out here to explore what cryptocurrency would look like if it became more widely adopted. However, it is useful to take a backup step. Bitcoin and other digital currencies are said to be an alternative to fiat money. But what kind of currency gives value?

How Currencies have value?

However, instead of telling individuals to carry complex amounts of cocoa beans, gold or other early coins, communities eventually exchanged the currency. However, many examples of printed currency were usable because they were valuable reliable stores made of metals with a long shelf life and little risk of depreciation.

In the modern age, printed coins often take the form of paper money, which does not have the intrinsic value of coins made from precious metals. Individuals use electronic currency and payment methods. Some types of coins rely on the fact that they are “representative”, meaning that each coin or note can be exchanged directly for a certain amount.

However, many global currencies are now classified as Fiat as countries move away from the gold standard in an effort to stem concerns about runs in the federal gold supply. The Fiat coin is issued by a government, not supported by any commodity, but rather by individuals and governments in the hope that the coin will be accepted by the parties. Now a days, most major global currencies are Fiat. Many governments and communities have found that the fiat currency is very durable and may collapse or depreciate over time.

How bitcoin could be the open source

Other open source groups have managed success using a similar open process. Linux, the widely used open-source operating system, was developed by thousands of users who contributed code and maintained the integrity of the software. Wikipedia, the online encyclopedia, works in a similar vein. The protocols are as old as the Internet, which is carried by millions of computers on a peer-to-peer, decentralized network based on a set of common rules.

How many bitcoins mined?

How do bitcoins gain value?

The value of bitcoin largely depends on its supply and market demand. Its value also contributes to other factors, such as the availability of alternative digital currencies — including their supply and price — and rewards for mining. The value is subjective. Bitcoin numbers have no value to themselves – Just as a gold it is a piece of metal until someone pays for it. Initially, they were worth pennies. Cryptocurrency prices continue to be in the green on August 8, 2021. The global cryptocurrency market cap is $1.81 trillion.  The total crypto market volume over the last 24 hours is $122.42 billion. The volume of all stable coins is now $97.06 billion – 79.29 percent of the total crypto market 24-hour volume. Bitcoin’s price is currently $43,116.36 and its dominance is currently 45.76 percent.

How does “real” money gain value?

The dollar has no value for printed piece of paper. But banks lend to personal bank accounts controlled by government central banks. Their value comes from the support of the government, which is known as “Fiat” and the Latin “let it be done”. Every government has a fiat coin, which, as some Latin Americans, the Gulf region and Asian countries do, decides to peck the currency at US dollars, while gold, oil and other global commodities are priced.

Once upon a time, the value of the currency was built directly on the value of gold. But today, most currencies have floating value, which is managed by the central banks, like the open sources of bitcoin, which carefully manage the money supply to combat inflation during economic growth and push growth during economic stagnation.

How do bitcoins become money?

Although the general trend in bitcoin’s value has been higher, economists see it as a potential bubble that would pop if the speculators lost interest in trading and making money on their virtual currency. Some Web-based businesses are starting to accept bitcoins as payment, but this is a gamble since they must eventually go to the speculative marketplace to convert the virtual money to dollars. There is no guarantee of what amount they will recover.

Conclusion

This is a turning point. Bitcoin is more likely to follow the path of Linux, which began as free software and is now widely used by thousands of companies for some or all of their software needs. Once major companies like IBM began to use it in custom applications, it became ubiquitous and legitimate. And although the software was technically free, companies charged for maintaining and installing it. Bitcoin can develop in the same way, playing a role in making e-commerce payments cheaper, more efficient and legal.