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Bit Coin

The document discusses several topics related to the price of Bitcoin: 1) It explains how the Bitcoin price is expressed as an exchange rate against other currencies, and how the total supply of Bitcoin is designed to be limited to 21 million coins over 100 years. 2) It states that with increasing demand but constant supply, the only factor that can change is the Bitcoin price, which is assumed to gradually increase over the long term. 3) It describes how buying Bitcoin on an exchange pushes the price up, while selling Bitcoin pushes the price down.

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Siddharth Devnani
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57 views17 pages

Bit Coin

The document discusses several topics related to the price of Bitcoin: 1) It explains how the Bitcoin price is expressed as an exchange rate against other currencies, and how the total supply of Bitcoin is designed to be limited to 21 million coins over 100 years. 2) It states that with increasing demand but constant supply, the only factor that can change is the Bitcoin price, which is assumed to gradually increase over the long term. 3) It describes how buying Bitcoin on an exchange pushes the price up, while selling Bitcoin pushes the price down.

Uploaded by

Siddharth Devnani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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The Bitcoin price is expressed as an exchange rate in relation to

another currency. So, for example, the Bitcoin-to-Dollar exchange


rate may be $1,750 for one bitcoin, written as $1,750 BTC/USD.

By design, a total of 21 million Bitcoins will be created over 100


years according to a logarithmic release function. At the time of
writing, just over 13 million bitcoins are in circulation, meaning that an
additional 8 million bitcoins will be mined over the next 95 years. Given
this timescale and the decelerating rate of increase of the coinbase,
the supply of bitcoin can, for practical purposes, be assumed to be
constant.

With increased usage and wider adoption of Bitcoin, the demand for
bitcoins is always increasing. With a constant supply and increasing
demand, the only factor in the equation that can budge is the price of
bitcoin by going up. Hence, assuming increased demand, the Bitcoin
price gradually increases over the long-term.

Functions of Bitcoin
Bitcoin has many functions and uses, but we will only consider those
that are salient to price fluctuations:

Bitcoin Payment Network Bitcoin as a currency


Bitcoin Storage and Transfer Bitcoin as a store of
wealth and medium of value transmission
Bitcoin Exchange Rate Bitcoin as a market
instrument and commodity

Buying Bitcoin
Every bitcoin exchange transaction that involves the purchasing of
bitcoin via another currency, whether fiat or cryptocurrency, has the
effect of pushing the bitcoin price up. Because the bitcoins are
changing hands from the exchanges wallet to the buyers wallet
there is an accompanying Bitcoin network transaction. However, it is
the exchange transaction that counts toward an uptick in the
Bitcoin exchange rate. Routine purchases are made daily, for
various purposes, and typically increasing toward month-end:

Company salaries

Wallet balance replenishment

Buy-and-Hold investment purchaes

Incidental purchases destined for paying merchants

Purchases intended for transmission


Selling Bitcoin
Every exchange transaction that involves the selling of bitcoin,
i.e. exchanging for fiat or another cryptocurrency causes a
downtick in the price of Bitcoin.

Let us consider the last example listed above, namely usage of the
Bitcoin network as a means of money transmission.

Someone working in the US, and paid in US Dollars, wants to send


money to their family in Zambia. Instead of using the illustrious
Western Union, they opt for the Bitcoin payment network. No
queues, no forms to fill in, no proverbial rubber gloves, and no
extortionate fee. They purchase bitcoin via an exchange that
offers BTC/USD, send the bitcoins to a relatives Bitcoin address, and
30 minutes later the relative in Zambia redeems some (or all) of the
bitcoin for Kwacha via a local exchange offering BTC/ZMK.

Of Bitcoin and Big Brother


Due to an unfortunate accident of history, the central banks and
government have become bed-fellows. As a result, their activities and
interests are intertwined, and their agent of exerting control and
wielding power became money. It stands to reason that any useful
money not directly controlled by them is a Problem.

It is, therefore, only natural that the most out-of-touch Old World
authorities make Orwellian statements and decrees to try to make the
threat go away. The smarter authorities go the opposite way by
embracing Bitcoin, encompassing it in their legal frameworks,
creating tax codes for cryptocurrency and then encouraging its
use.
The prospect of regulation by regional authorities or parastatals
seems to make most Bitcoin users quake in their bitboots, but they
should best remember that the Genie is Out of the
Lampalready. Official statements and announcements of
the following kinds often result in strong price movements:
Government and Central Bank Statements

Talk of Regulation by parastatal bodies

Incomprehensible Legalese

Talk of Taxation

Does News Move the


Bitcoin Price?
News announcements frequently coincide with price movements in
the market. There is some debate as to whether the relative positivity
or negativity of a news announcement causes a corresponding
upward or downward movement in price. Evidence suggests that
market participants are catalyzed into action by news
announcements but that the direction of price movement is mostly
unrelated to the actual content of the news and determined by the
social mood at the time.
Notice, in the following chart, how eBay considering
Bitcoin apparently ignites a rally, yet Dell the worlds largest IT
retailer actually accepting Bitcoin payment leads to a sell-of.
V
How do I send Bitcoins to a Bitcoin address?

Zebpay Team

February 13, 2017 12:43

Follow

Please follow the below steps.

1. Open Zebpay

2. Click on the '+' button at the bottom and click on 'send bitcoins'
3. Click on the icon for 'bitcoin addresses' on top and then click on the icon to add a new bitcoin address
4. Scan the bitcoin address QR code or paste it, add a name for the bitcoin address and then click on the
tick mark icon
5. Enter the amount in local currency or click on the currency icon to enter the amount in bits (1 bitcoin =
1,000,000 bits)
6. Click the the note icon if you wish to enter a note for the receiver
7. Enter your 4 digit PIN to confirm the transaction

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