Thursday, 21 December 2017

Economy of a BITCOIN

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ASPECTS REGARDING THE ECONOMY:

General use

                        According to research in cambridge university there are between 3 to 6 million unique users of bitcoins using Cryptocurrency wallets and the active users are increasing day by day due to increase of demand for bitcoin..The usage is mostly resulting in storage due to its volatile increase in currency among different countries..

Buying and Selling

                      Bitcoins can be brought and sold on and off line..Participants offers bids for selling or buying  their bitcoins.Offline bitcoins are gained from a individual or from Bitcoin ATM's.. These are not similar to our normal machines but are connected to internet allwoing the transformation of cash with the present values of bitcoins.these make a charge of 7% transcation fee and exchange rates are also high in demand..Nearly 1000 bitcoins came into existence globally during the year 2016..

Price and voltaile nature 

                 According to survey in 2014 bitcoin has voltaility seven times greater than gold and nearly eighteen times greater than US dollar.. and a group of japanese scholars stated that there is no stabilization mechanism.. 

                     Bitcoin has high voltility due to its high liquidity,This voltaility does not matter in games like gambling , and international remittances..The bitcoins had gone through mant ups and downs resulting in bubbles and busts.The price of Bitcoins is roughly proportional to square of number of daily users involved in the network..

Bubble dispute 

                  Bitcoin had been labelled as a speculative bubble during the odd times..Some of the people even declared as it is a mirage and can never be achieved and useful only for the drug dealers.. These disputes held on leading to a unidentified drawback for the bitcoin..


Ponzi Scheme issue

                         Some of the generalists declared it as a ponzi sheme where this scheme is nothing but the inventor pays off to the older investors by generating revenue from new investors..Even some of them declared it as a Pyramid scheme..but even the odds are going on laterallay many organisers are buying bitcoins for their clients..


Obituaries

                  In the year 2011 many of them declared that bitcoin is dead.Some of the magazines mentioned various dates leading to various expires..some of the developer also proclaimed it as a failure model ..


Reception

                   Some shown a positive response where others critisized it ..Officials in countries like brazil,UK,USA have recognised the power of bitcoin for providing its legitimate financial services..Even Polticians are attracted to finanacial matters of bitcoins.. when bitcoins are properly utilized many things are made at ease such as simplify transactions,transparency,eradication fake users ,many came to into an existence..

Financial institutions

                       These is major step taken by bitcoin , they have difficulty opened the traditional banks where the lenders had a worry of hacks and illicit ideas..several organisations turned their back towards bitcoins at the early ages which are pleasing it..Bank of america stated that bitcoin may become a competitor for the traditional currency..The first bank that made a transation in bitcoin was opened in boston..












       

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