How much is a Bitcoin worth? Bitcoin is a hot topic among both professionals and casual observers. Many call it the currency of the future. In 2017, it’s value experienced an all-time high albeit punctured by worrisome falls. Skeptics worry: How much is the real value of a Bitcoin? Identifying the value exchanged in modern Bitcoin transactions is a difficult task. It’s clear cryptocurrencies now play an integral role in commerce and banking.
How Much Is a Bitcoin Worth?
What is Bitcoin?
How Are Bitcoins Obtained? How Are They Valued?
Like any currency, Bitcoin’s value hinges on how much people are willing to exchange for it. Transaction processing occurs via mining with the use of mining hardware. To mine Bitcoin, hopefuls must complete difficult computational puzzles. Mining devices collect pending block transactions to form one of the puzzles. This takes place every ten minutes.
1. Bitcoin Mining
Bitcoin mining is a race followed by confirmation of the race’s results. The first miner to solve the puzzle announces his or her victory to the rest. They then verify the puzzle’s solution. Once the others approve, they encode the block on the ledger. Miners get Bitcoins for rewards after a certain number of blocks are added to the ledger.
2. Bitcoin Exchange
3. Bitcoin Lending
A select group of enthusiasts earns Bitcoin via interest. They lend Bitcoin using any of three methods: direct lending, peer-to-peer lending, or depositing Bitcoin to online banks. Bitcoin are also available by gambling, with inherent risks, of course.
Once obtained, Bitcoin can be stored in digital wallets. Think of them as dollars or credit card replacements. These are found on the owner’s computer or in the cloud. Bitcoin wallets are not FDIC insured. Skeptics worry about the security risks of storing cryptocurrency in virtual wallets. Good thing there are several security measures to address this concern.
How Much Are Bitcoins Worth?
Bitcoin value fluctuates drastically. Upon its creation, Bitcoin held next to no value. The first true growth occurred during the summer of 2011 when Bitcoin’s value reached $31. A major price drop soon followed.
Is Bitcoin the Future?
Enthusiasts believe that Bitcoin will replace other currencies later on. Based on it’s increasing popularity, these assumptions may be justified. One can now order pizza, book hotel rooms, and complete other everyday transactions using only Bitcoin. It’s even possible to use Bitcoin to fund an individual retirement account.
Downside of Bitcoin
Despite all the concerns presented, it’s important to consider the potential payoffs of investing in Bitcoin. After all, Bitcoin has several desirable qualities. For example, it is a peer-to-peer digital currency network. It doesn’t depend on any institutionalized government or bank influence. This is a refreshing change from many investment options. This causes a pique in investors’ interest.
So, how much is a Bitcoin really worth? Identifying the value exchanged in modern Bitcoin transactions is a difficult task. It’s clear that cryptocurrencies now play an integral role in commerce and banking.
Have you invested in Bitcoin lately? What have you used it for? Let us know in the comments section below.
Editor’s Note – This post was originally published on January 22, 2018 and has been updated for quality and relevancy.