As far as i know bitcoin has a high volatility given the fact that it is in demand in the market but i did not expect hat it is so high that it can really go from 1-100 and 100-0.
I want your insights about this volatility of bitcoin.
The parameters that determine the volatility of the bit are many factors.
Still the creator of the bitcoin code, the developer of the blocking process Satoshi Nakamoto compared the crypto-currency mining with gold mining. The similarity is obvious: the value of precious metals and elements is determined not so much by their practical relevance, as by the rarity and demand. Digital money has a cost that must be taken into account in calculations, from which the bitcoin rate develops:
electricity costs;
investing in the organization of mining farms;
commission for transactions.
But compared to the price of the crypto currency, which is ready to be paid at any time by the market-controlling structures and private investors, this is insignificant waste. The greater part of the price is consumer demand, the willingness to give in exchange for bitcoins more traditional material goods.
To understand how a set of numbers and letters of code began to cost as a second-hand foreign car, you need to imagine how the cost of bitcoin is formed, and how the demand for any exclusive is formed:
Another 8 years ago, a system was proposed in which for its "work" of the machine its owner became the owner of a unique code-bitcoin. While no one understood what it was, the question of what bitcoin depended on did not stand: the value of this set of signs was not higher, at this page of the site.
The group of crypto-enthusiasts takes the case, explains to some of the followers that this code is money, and suggests entering into the game. The analogy with children playing in the sandbox, and assigning a mountain ash a valuable bill, and the lilac - a bargain, is obvious: the participants in the game decide on what the price of bitcoin depends on. The equivalent of btc was assigned to $ 1.
But playing children, as a rule, exchange the same "conditional" goods. With bitcoin, a miracle happened: someone, namely the seller of pizza, agreed that the resultant set of signs, the key to the purse with bitcoin, has a real price - he gave for 10 thousand btc two circles of pizza. And from that moment into the question of how the bitcoin rate is determined, child factors did not intervene at all-the crypto currency was worth as much as it is offered for. This system has survived to this day.
