/biz/ - Business & Finance

>>9773410
Whoever gets it right is given the opportunity to mine (verify) the block and collect a BTC reward (the electricity costs required to mine BTC were what originally set the price. Since the equations get progressively harder to solve and thus require more electricity to verify, coupled with the fact miners are paid less BTC for each block over time, it increases BTC's value) There are more details to mining and BTC security but that's not needed to explain why it's experienced and sustained such parabolic growth.

>>9773427
Another important fact I forgot to mention is that there can only ever be 21 million bitcoins created and that the bitcoins rewarded to miners are completely new. Once we hit 21M in 2100 Miners will be paid in transaction fees.

daytraders are the ones who drive the market and set most prices. Here is what attracted them initially:
1. Bitcoin's legitimacy as a secure store of value
2. Recognition of an early online market (Silk road, gaming sites, etc.) which accepted BTC as legal tender
3. The ability to send large amounts of Bitcoin securely, very quickly, band with virtually no cost.
4. People in third world countries used BTC as a way to preserve their wealth against their own state currency's inflation

>>9773444
>third post got trips

>>9773480
5. Liberals and Anarchists endorsed it as a way to escape government manipulation, regulation, and privacy invasion.
6. Vague beliefs on BTC becoming mainstream tech.

Because of this, people started acquiring bitcoin in hopes of being able to sell it to others for much more than they bought it for.

>>9773498
Within the past few years new cryptos based off the bitcoin tech claiming to be of better quality or being able to fill new market demands started appearing. These currencies can't be exchanged for cash but BTC can, and these alternative currencies can only be purchased with BTC. This gave BTC a ton more currency in it's ecosystem with the added benefit of diverting some of it's value to other assets that'll eventually HAVE to be brought back into BTC if people want to turn it back into cash. Lots of these new alt-coins (alternative coins) are just BTC clones with new skins and empty promises (shit coins). But some may be legitimate and if you can put your money in the real projects early on you could see your investment increase by 100x-1000x.

>>9773538
Once the shit coins surrounding BTC are fully realized to be worthless and all the currency put in their ecosystem gets drawn back into BTC, BTC's growth at that time will be parabolic, and most likely followed by it's final crash before being completely discarded for something better, or stabilizing and gaining mainstream adoption as it's own currency.

>>9773566

The biggest spike of $19, 000 USD per BTC last December happened because China had just lifted their ban of buying cryptos.

>>9773676
And since everyone already holding BTC knew that there'd be a ton of buyers coming in from China, they demanded more money for their BTC. And since the price started to spike violently people started putting all their cash and current crypto holdings back into BTC to ride the wave, which in turn raised the price even further. Once the people who had made enough profit off BTC and cashed out, no one was there to keep the price up and then everyone started selling to either consolidate gains or minimize losses. and that's why BTC is at $7000 USD. Now people are just waiting for better news to come out, for the shit coin ecosystem to rejoin with BTC, and for legitimate early blockchain company's to put their money into.

>>9773688
TL;DR
>day traders buy BTC in hopes of selling it for more.
>They convert BTC into other cryptos that they believe will increase in value in the short term based on news, hype, and shilling on online forums so they can take that higher value crypto and exchange it for more BTC than they originally had.
>day traders are accumulating BTC by indirectly stealing everyone else's BTC by selling earlier than the competing day traders and also by taking it from the clueless schmucks who bought in anticipation of sustained value appreciation of their alt coins (shit coins) so they can eventually sell their gains for cash via PayPal.

>>9773410
>They do this by getting their computers to attempt to solve a mathematical equation.

This is a dumb way of saying they are playing a big stupid game of guess the magic number

>>9773959
First off; Crypto (starting with bitcoin) became capable of being a valuable digital asset class in the first place because it was the first digital currency that couldn't be counterfeited or hacked. It was able to achieve this through certain algorithms and distribution. It's legitimacy is maintained by people called "miners". These miners have a complete list of every transaction that has ever taken place and are paid in Bitcoin to add and verify new transactions while also verifying old ones (mining). Miners compete amongst each other for the opportunity to mine (verify) "blocks", which are basically digital ledgers, for a BTC (bitcoin) reward. They do this by playing a big stupid game of guess the magic number.