How does Bitcoin transaction Really Work? Why does Bitcoin price change?

[Ambatman]

coins moving from one address to another address does not affect the price
the price is based on the market orders of centralised exchanges. not the blockchain itself
many people keep saying "supply and demand" but thats just high school bad economics lessons

so prices keeping other economic factor constant is determined by Market order on CEX?
This is why moving coins through the blockchain or in exchange for a service doesn't affect the price.
The actual price reflects the supply and demand order of the exchange.

[coolcoinz]

^
It's not even that simple. People say that it's supply and demand but it's a very broad term.
Take market depth for example. With bitcoin it's very low when compared to Forex or stock exchanges. This means that all large exchanges combined barely have 10% of all bitcoin in circulation available for purchase along with corresponding buy orders in fiat. So if you come to a single exchange with enough fiat money to buy half of what they have, you can double the price.

Literally if you were able to buy 100k bitcoin, you could make the price instantly go beyond $100k by draining all available offers. Less than 1% of total supply of bitcoin could double the price, but it works the other way too. Dumping 1% of the supply could cause the price to drop below $20k within minutes.

Then there's leverage where people gamble on exchanges with borrowed money. Dumping as little as 1% of the supply would liquidate these positions and make the price virtually lower than it should be. It again works both ways and buying 1% of the supply would also cause liquidations and move price tickers much higher than they should be.

[nakamura12]

Regarding bitcoin's price depends on the supply and demand which have been discussed for many times here in the forum. About the price is I think it is like this, person A sold 1 BTC for $60k and person B sold 1 BTC for $59k and person C sold 1 BTC for $61k so we add the three price sell and then divided by 3 which is $60k and the average price that people selling their BTC is $60k. So if there are lots of people who rather to buy BTC for $59k then the price of bitcoin will decrease that's why it changes many times. For making it short, the answer that many people will give is supply and demand.

[Cryptohygenic]

I have technically got me on this same perception of thoughts but then I can only say when demand is high and the price of bitcoin increases, holders are most attracted to make translations maybe cashing out their profits or the price increase may be attracted to beginners which transactions at that moment maybe congested requiring transaction fees increase also bitcoin gaining price momentum when demands are higher than suppliers.

[FortuneFollower]

^
It's not even that simple. People say that it's supply and demand but it's a very broad term.
Take market depth for example. With bitcoin it's very low when compared to Forex or stock exchanges. This means that all large exchanges combined barely have 10% of all bitcoin in circulation available for purchase along with corresponding buy orders in fiat. So if you come to a single exchange with enough fiat money to buy half of what they have, you can double the price.

Literally if you were able to buy 100k bitcoin, you could make the price instantly go beyond $100k by draining all available offers. Less than 1% of total supply of bitcoin could double the price, but it works the other way too. Dumping 1% of the supply could cause the price to drop below $20k within minutes.

Then there's leverage where people gamble on exchanges with borrowed money. Dumping as little as 1% of the supply would liquidate these positions and make the price virtually lower than it should be. It again works both ways and buying 1% of the supply would also cause liquidations and move price tickers much higher than they should be.

Yeah, leverage is a roller coaster for sure, and a risky ordeal.
And then again, nobody does have such an amount of BTC, but it would really be that way, albeit, with such a loud noise from such an event that even Satoshi would blush probably

[MainIbem]

I have technically got me on this same perception of thoughts but then I can only say when demand is high and the price of bitcoin increases, holders are most attracted to make translations maybe cashing out their profits or the price increase may be attracted to beginners which transactions at that moment maybe congested requiring transaction fees increase also bitcoin gaining price momentum when demands are higher than suppliers.

Normally, the price of Bitcoin operates with demand and supply and when the demand is high, it tends to go up but when it's lesser the price dips, well many beginners misunderstand the concept and only invest on Bitcoin when price falls so they'll take profits when demand is high but they're getting it all wrong, cause one mustn't wait for price to fall just to invest and take profits. In conclusion, the price of Bitcoin can never be stable, it must always fluctuate because it is highly volatile in nature and that's just it moreover one don't just cash out their profits at given increase in the price of Bitcoin due to high demand, using Bitcoin for investment option is for long-term purpose the person must have invested for about 4-10 years before thinking of taking profits when their's an increase during that period.

[FortuneFollower]

I have technically got me on this same perception of thoughts but then I can only say when demand is high and the price of bitcoin increases, holders are most attracted to make translations maybe cashing out their profits or the price increase may be attracted to beginners which transactions at that moment maybe congested requiring transaction fees increase also bitcoin gaining price momentum when demands are higher than suppliers.

Normally, the price of Bitcoin operates with demand and supply and when the demand is high, it tends to go up but when it's lesser the price dips, well many beginners misunderstand the concept and only invest on Bitcoin when price falls so they'll take profits when demand is high but they're getting it all wrong, cause one mustn't wait for price to fall just to invest and take profits. In conclusion, the price of Bitcoin can never be stable, it must always fluctuate because it is highly volatile in nature and that's just it moreover one don't just cash out their profits at given increase in the price of Bitcoin due to high demand, using Bitcoin for investment option is for long-term purpose the person must have invested for about 4-10 years before thinking of taking profits when their's an increase during that period.

Some do buy in lumps, some invest no matter the price but gradually, trying to DCA, however, it all depends on what target you have and how much time and funds you've got to achieve it. It's all possible with crypto and BTC.

[Smartprofit]

Okay so I was working on a script on Timelock
Well practicing should be better used and in the process it hit me
How does transactions affect price?

Like does exchanging Bitcoin for say a Goods or service affect price? (I doubt it does)
So what now affect price
Yes it's the forces of demand and supply
The more the demand the higher the price but how does this differ from exchanging Bitcoin for a goods or service.
I have been looking at Bitcoin from the lense of trading and just found out about that

Like am curious how's the price really affected.

I don't know if I was able to coin my question well though
But why do price move, is it subjective?

Okay this is the first, now the second I'm a fan of holding but what would happen if everybody holds Bitcoin
'If' that is hypothetical. Wouldn't that be bad for the Blockchain.
.
Moving Bitcoin from one wallet address to another counts as a transaction
Exchanging for service is a transaction then what's trading or selling or buying.

Sorry everything is just all over the place, I'm just shocked I don't really understand this or maybe I'm just lacking Milk



I realised I was aiming for the moon when I don't even know how the Rocket works.


Thank You.

The sale of goods, works and services (otherwise known as realization) is the transfer of ownership of the goods (the result of the performance of works or the provision of services).

Payment for goods, works and services is carried out by counter-transfer of funds (most often this is fiat currency, less often Bitcoin). A transaction is not only payment for goods, works, services, property rights, but also any movement of satoshi from one address to another. When making transactions, commissions are paid to miners. Miners ensure the security of the Bitcoin network.

The price of Bitcoin depends on supply and demand. Since the price of Bitcoin is denominated in fiat currencies, and fiat currencies become cheaper over time due to inflation, the price of Bitcoin increases over time.

After all, the supply of Bitcoin is initially limited - there cannot be more than 21,000,000 coins in the world (in practice, there are fewer, since some users have permanently lost access to their Bitcoins).

[Zigabel]

Giving a straight answer to your question on price, Value is a main reason price continue in the upward direction, Bitcoin increases it's capacity in value every year literally and a default reaction to that is in the increase in price, just like we see in Real estate, it's not rocket science but a simple economic logic.

[FinneysTrueVision]

Okay this is the first, now the second I'm a fan of holding but what would happen if everybody holds Bitcoin
'If' that is hypothetical. Wouldn't that be bad for the Blockchain.

If everyone decided to hold their Bitcoin, it would be because people consider it to be a good store of value. It is similar to holding gold bars. It can remain idle and still be valuable. And because it is valuable, it would create more demand from people wanting to hold it in their portfolio.

[FortuneFollower]

Giving a straight answer to your question on price, Value is a main reason price continue in the upward direction, Bitcoin increases it's capacity in value every year literally and a default reaction to that is in the increase in price, just like we see in Real estate, it's not rocket science but a simple economic logic.

Yeah, and because people are eager about it and about holding it till they see it fit. And they will see it as beneficial if BTC stays on the right track as of now.