Rank: Member Joined: 12/30/2012 Posts: 545 Location: NBI
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Bitcoin is 3 things:
 1. bitcoin is a new kind of money - cash for the internet. Just like we all have cash for the REAL world, bitcoin is cash on the internet.
It is not issued by governments, central banks or anyone else for that matter. This is one way it is different from other currencies you are familiar with. The process by which bitcoins comes about is by a technically complex process termed ‘mining’. Computer experts agree the process is pretty amazing.
It is a peer-to-peer decentralized currency designed not to rely upon intermediaries for transfer anywhere. You and I can exchange bitcoins without a 3rd party or intermediary.  bitcoin is different from other currencies because its supply is capped and known from its inception. 21 million bitcoins - that is all the bitcoins there will ever be! Thus, it is deflationary. Currently, 13.6 million are in circulation. Every 4 years the rate of bitcoin money supply production cuts in half. The next halving is in 2016.
This makes bitcoin
2. A digital asset with digital scarcity. Only 21 million and the last produced in 2100. This has led experts to proclaim it as digital gold for a digital global economy
This is public knowledge, some people have recognized the extreme value of this especially in a world increasingly relying on technology, the internet and an interconnected global economy. There are a lot of people with bitcoins who are holding them long term. Approximately 70% of all bitcoins have not moved in 6 or more months. Only 5% of bitcoin's monetary supply is transacted daily, 8% weekly and 10% monthly.Here is a chart illustrating this  3. Bitcoin (with a capital B) is a layer on top of the internet. You will frequently encounter 'the blockchain' in reference to Bitcoin protocol. It makes it possible to redesign the internet in a way previously not possible. The best brains in the world are excited by this and are involved in seeing this technology succeed.
In considering the value of bitcoins, all these 3 factors come into play as they are all interdependent.
The value of bitcoins is thus determined by a free market. No one decides the price, the market decides the price.
*Capitalism and Freedom -- Milton FriedmanBitcoin is still in early adoption, later than a couple of years ago but still early in the broader picture. It is yet to go mainstream. This explains why it is ‘finding itself’.
Here is a graph of all the events on a price chart over the whole of 2014. BITCOIN TRADERS KENYA Whatsapp group +254 705 299 429
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