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Determining Bitcoin Value

ArticleID 169  
Writer Isaac Thuku
Category Personal Article
Bitcoin value and bitcoin price are totally two different things. Price indicates the monetary value whereas bitcoin value is indicated by its features, its subsequent network and the ongoing innovation. Bitcoins can be copied several times but it is rather interesting to know that it can only be spent once. In the event that there are two similar bitcoins in two different places, only the first transaction will take place. The second transaction will be rejected. This feature is what creates a difference between other digital currency and the bitcoin. This offers its scientific value.

In reference to its technological value, you will note that bitcoins are decentralized. In this, you can be sure that no one can shut down its circulation. This increases it value as it is an irreversible disruptive technology. Its social value reflects on the mode of payment. Each bitcoin belongs to someone. Each of these people has the liberty to control the value of the bitcoin they have at hand. In this, the risk of having to trust external authorities is minimal. No one has to control value considering they do not own the given item. It is due to the network links that will help to totally eliminate centralized authorities across the globe.

To help secure bitcoin transactions, they will use public-private key pairs. It is therefore impossible to steal or forge a bitcoin. Bitcoin value will depend on transactional and reservation demand which will provide the total market value of a currency. The bitcoin value will therefore depend of both the consumers and investors. As indicated, there is no difference between bitcoin value for commerce and that for investment, and then it is important to consider the bitcoin total monetary base when considering valuation.

To help rate a bitcoin coin value, you also need to consider the bitcoin Hurdle rate. There are some assumptions that have to be made when valuing bitcoins. You look at the bitcoin terminal value as the future monetary base. It will also increase due to a compounding factor over time.

Looking at the current bitcoin value, it is practically enticing. The belief is that its value will be getting better and that in the near future; it will be one of the most valuable items in the digital currency market. To make a bitcoin value, you basically need two assumptions:

1. Its future monetary base

2. The risk adjusted rate of return
Bitcoin Value, Determining Bitcoin Value, Entrepreneur, make money online, Invest online
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