You must have seen in news that the value of Bitcoin is all-time high. You must have encountered many websites selling Bitcoins. But have you wondered, What is this Bitcoin? What is it's value?
So, basically Bitcoin is a cryptocurrency. There are many cryptocurrencies in the market like Dogecoin, Ethereum, litecoin etc. The market value of Bitcoin is highest. Now what is a cryptocurrency? It is a digital currency which cannot be seen physically. Therefore Bitcoin is not a coin or a note. It is a digital currency. It was created by Satoshi Nakamoto in 2009.
Satoshi Nakamoto
Bitcoin is a decentralized currency, this means that there is no central authority that controls or regulates the currency. The working of Bitcoin is a complex process which includes blockchain technology. This would be explained in next blog.
But now as there is no central authority then How will the value of bitcoin be decided?Bitcoin is like a commodity. The price of bitcoin is determined by the market in which it trades. In other words, its price is determined by how much someone is willing to pay for that bitcoin. The market sets the price of bitcoin as same as Gold, Oil, Sugar, Grains, etc. is determined. Bitcoin, like any other market, is subject to the rules of supply and demand i.e.
More the demand + less supply= Prices go up
Less the demand + more supply=prices go down
So this is all for today. Thank you for reading. More information about Bitcoin working will be shared in next blog. Written by Nidhi Patel
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