The sole reason people use bitcoins is to more easily transact dollars (or any currency) from one place to another.
But would it make any difference if bitcoin price was $1 or $0.1 for its use?
Let's say you want to send someone $100 dollars and than you buy 100 bitcoins, send it to him, he receives them and sells them to get his dollars. Transaction of dollars complete.
There is no need to hold bitcoins except for hoping price will rise, and there is no reason for price of bitcoin to rise except if people hold them because of speculation.
Therefore, price is almost entirely speculative, because if it was up to usage price would be small since everyone would be selling them the moment after they recieve them.
You could say you hold it because you can buy stuff with it, but really you can't. You're just buying with dollars bitcoin represents (you're transacting dollars again). One bitcoin means nothing, you need to have it expressed in dollars to grasp the meaning of it. People need dollars because they're legal tender and they pay taxes with them, while nobody needs bitcoin. They just need it to transact those dollars, but they don't need to hold them.
But would it make any difference if bitcoin price was $1 or $0.1 for its use?
Let's say you want to send someone $100 dollars and than you buy 100 bitcoins, send it to him, he receives them and sells them to get his dollars. Transaction of dollars complete.
There is no need to hold bitcoins except for hoping price will rise, and there is no reason for price of bitcoin to rise except if people hold them because of speculation.
Therefore, price is almost entirely speculative, because if it was up to usage price would be small since everyone would be selling them the moment after they recieve them.
You could say you hold it because you can buy stuff with it, but really you can't. You're just buying with dollars bitcoin represents (you're transacting dollars again). One bitcoin means nothing, you need to have it expressed in dollars to grasp the meaning of it. People need dollars because they're legal tender and they pay taxes with them, while nobody needs bitcoin. They just need it to transact those dollars, but they don't need to hold them.
this has been said soo many times, but i will let you know since you are a newbie.
bitcoin price is primarily determined by how much it costs to mine a bitcoin. factored into this is electricity fee + maintenance + hardware + overhead.
the next factor is "news" and "whales" and the next one is normal end users.
doesn't get more complicated than that, supply/demand like usual.
it is not as speculative as most people say. there is some profound tangiblity built into it.
When there are real uses for bitcoin I think it will finally stabilize. Right now bitcoin is built off people transferring money to other people and then going directly to fiat, and the other part is investors. Almost no one transacts purely in bitcoin. I hope this will change.
