When the bitcoins were developed in 2009 by the software developer whose name was Satoshi Nakamoto there were very less people who knew about this currency. The first-time bitcoin transaction was used for the buying of pizza to which about twenty thousand bitcoins were spent. At that time Satoshi Nakamoto himself did not know whether his creation would be successful or not but with time we can say that it was a great success in the domain which brought out the revolution in the transaction process and many other things related to finance.
The initial value of bitcoin was very low but as time passed the value of bitcoin continued to increase and now it is evident from the market that bitcoin is reaching new heights of investment daily and the price of bitcoin is increasing very rapidly. In this article, we will discuss the reason behind the increase in the value of bitcoins in the last few years but, we should know about bitcoins and how the bitcoins transaction is done. For trading in bitcoins, you can visit the online trading platform https://immediate-edge.co/de/
Bitcoin is the first cryptocurrency that was developed in 2009 for the sole purpose of a decentralized form of banking and making the transaction process very fast and secure. To maintain the increase in the price of the bitcoin in the coming future Satoshi Nakamoto fixed the total no. of bitcoins that can be mined in the world i.e. 21 million. The transaction of bitcoins is done by the blockchain process which is the backbone behind cryptocurrencies. Without blockchain, there is not much value in bitcoins.
Reasons for the rise in prices of Bitcoin
Safety of assets is an issue
The main reason behind the success and rise in the value of bitcoins is safety because people want to invest in safe assets. Although bitcoins and other cryptocurrencies go through peaks and troughs like other currencies they have more stability in price than others. And in addition to this, the blockchain technology used by bitcoins is very safe and fast as compared to the traditional way of transactions. With the use of blockchain, the involvement of central organizations or third-party people in the transaction process is no more which results in fast transactions and provides safety against frauds.
Wide acceptance as an asset
The other reason could be the acceptance of bitcoins as the payment method by several companies in the world. The biggest example of such companies is PayPal which announced that it would allow its users to use bitcoin as a payment option due to which the company related to PayPal also started taking bitcoins as payment. And the experts say that shortly almost all companies will start to follow the payment option of bitcoins. One of the other reasons behind the hike in the price of bitcoins is the production cost of bitcoins. Bitcoins are not easily available in the cyber world; one has to solve algorithmic problems for the creation of one bitcoin and this process is known as bitcoin mining. With the increase in the knowledge about the mining process, it is very difficult to mine easily which causes an increase in production cost thus increasing the overall value of bitcoins.
It is not true that bitcoin will remain forever, but will replenish after some time. Be it after some years or so, there are limited bitcoins on the network, and once mined these will be near to an end. This is a prime reason for rising in bitcoin prices. Another major reason is of halving. The reward that is given to miners for their work keeps on decreasing with time leading to dearer mining of bitcoin in near future.