Topic: Who updates bitcoin value? (Read 932 times)
Bitcoin value is being updated in the market. It depends on the demand of the consumer. If there is high demand for Bitcoin in the market, the value might increase because manypeople will buy it.
Basically it is anonymous currency.It is handling by anonymous.As people investing in Bitcoin like that the value of bitcoin is rising.Now answering to your question that why it is increasing day by day who is increasing them simple is that think about your any asset of the market the price of which is increased when the demand of it is increased just like gold so the same is happening in bitcoin that with the demand the price of it is increased.
Yes bitcoin price increased as demand increases because buying will spikes up higher and more will invest. So this must be updated by the marketplace admins automatically and they will be correcting some erroneous price rapid increase which mainly other investors are thingking to it as a bubble price. Don't worry if there were time of fluctuations because that's normal and I am confindent that those bigger whales will just let that price to fall for worst, they will do a price pumps and buy more holdings just to take hold of their assets.
I am also not very familiar with the changing price of bitcoin in every time. But what I am enough is from every case of mining the value of goods will be expensive if the goods are rare (hard to get).But this is very different from bitcoin.Although bitcoin prices are high and we keep it easy also still get / buy bitcoin
So if i am not wrong the traders and the news which flows are main reasons of the price decided.
You're not wrong, that's all about demand and supply relationship. Traders (including buyers and sellers) are buying or selling bitcoin depending to their ideas about the market and news.
There is no 3rd party that determine the prices. The prices are determined directly by buyers and sellers. In exchanges there are walls containing buy and sell orders. This is where prices are determined.
Assume that I want to sell one coin and there is no other person want to buy that coin. There are 100 people that want to buy one coin. What will happen? As I am the only person who intend to sell that coin I will use the opportunity and increase the value till there are persons want to buy that coin. A s a result the price will increase.
Now assume that I am the only person who want to buy one coin and there are 100 people intend to sell their coin. In this case they have to decrease the value so that can sell their coin to me. As a result the price will fall.
So the prices always determined by buyers and sellers and there is no 3rd party.
Assume that I want to sell one coin and there is no other person want to buy that coin. There are 100 people that want to buy one coin. What will happen? As I am the only person who intend to sell that coin I will use the opportunity and increase the value till there are persons want to buy that coin. A s a result the price will increase.
Now assume that I am the only person who want to buy one coin and there are 100 people intend to sell their coin. In this case they have to decrease the value so that can sell their coin to me. As a result the price will fall.
So the prices always determined by buyers and sellers and there is no 3rd party.
So if i am not wrong the traders and the news which flows are main reasons of the price decided.
though you can (and should) hold bitcoin on your own private key using bitcoin software. people deposit funds into third party services(exchanges) and then trade on exchanges.*
doing trades using bitcoin software where the funds are on your own private key are peer-to-peer and do not contribute to the price 'value'
by doing trades using exchanges the funds are on the exchanges private keys, meaning you have to trust the exchange is ethical/moral/legit to not disappear with your funds. but the advantage is your trades do contribute to the price 'value'
the price "value" is measured by the buy/sells done on these exchanges.
this value is not a real value of all coins. but the value of the current prices certain amount of coins are bought/sold at, at the time.
some exchanges only handle buy/sell between people of 0.00xx coins at any time, some buy/sell xx.xx coins at any time. but exchanges do not show the 'trades' of all coins in circulation, just the trades done between people in that exchange
there are multiple exchanges. and also multiple sites which may vary in 'value' because they are separate from each other (have their own orders) generally though exchanges respond like sheep if they see one exchange move in a certain direction or another exchange move in another direction thus the prices do end up being quite similar
some sites get the data from each exchange and then averages the trades of the exchanges these are usually just value estimator sites which dont do any trading and only purpose is to display an average value.
but remember when you see a price of $XXXX it does not mean there are $xxxx stored in bank accounts to back every single bitcoin in circulation.
it is just a display of the latest price a bitcoin has been bought/sold on an exchange. or just a display of the average of multiple exchanges.
do not take much notice of the "market cap" as that is just a multiplication of the average buy/sell of a current order.. and not to be thought of as the amount of real $$$ that is invested.
doing trades using bitcoin software where the funds are on your own private key are peer-to-peer and do not contribute to the price 'value'
by doing trades using exchanges the funds are on the exchanges private keys, meaning you have to trust the exchange is ethical/moral/legit to not disappear with your funds. but the advantage is your trades do contribute to the price 'value'
the price "value" is measured by the buy/sells done on these exchanges.
this value is not a real value of all coins. but the value of the current prices certain amount of coins are bought/sold at, at the time.
some exchanges only handle buy/sell between people of 0.00xx coins at any time, some buy/sell xx.xx coins at any time. but exchanges do not show the 'trades' of all coins in circulation, just the trades done between people in that exchange
there are multiple exchanges. and also multiple sites which may vary in 'value' because they are separate from each other (have their own orders) generally though exchanges respond like sheep if they see one exchange move in a certain direction or another exchange move in another direction thus the prices do end up being quite similar
some sites get the data from each exchange and then averages the trades of the exchanges these are usually just value estimator sites which dont do any trading and only purpose is to display an average value.
but remember when you see a price of $XXXX it does not mean there are $xxxx stored in bank accounts to back every single bitcoin in circulation.
it is just a display of the latest price a bitcoin has been bought/sold on an exchange. or just a display of the average of multiple exchanges.
do not take much notice of the "market cap" as that is just a multiplication of the average buy/sell of a current order.. and not to be thought of as the amount of real $$$ that is invested.
Clear explanation I think, thanks to franky1.
So, it doesn't matter what preev show to us, it just average measure of bitcoin price from many exchanges, it just bitcoin value converter not an exchange. What affect your bitcoin value is local exchange where you convert bitcoin into fiat currency, no matter what other exchanges list the price, just focus to local exchanges. But, it is good idea to watch over all other exchanges to predict global market, whether it goes up or decline as it will influence local traders to sell or buy bitcoin.
franky1
I have one question, almost everyone wonders on high bitcoin price but we see how it falls sometimes. Also logically when you have something which many people wants and that's cost is for example 1000$ at the moment and everyone feels ok, why will you go and sell for 900$ when you can sell for 1000$ and you won't have problem of buyers. I want to say that logically bitcoin price has to grow everytime and not to fall but as we see it sometimes falls and fall was high in past years sometimes.
I have one question, almost everyone wonders on high bitcoin price but we see how it falls sometimes. Also logically when you have something which many people wants and that's cost is for example 1000$ at the moment and everyone feels ok, why will you go and sell for 900$ when you can sell for 1000$ and you won't have problem of buyers. I want to say that logically bitcoin price has to grow everytime and not to fall but as we see it sometimes falls and fall was high in past years sometimes.
Basically it is anonymous currency.It is handling by anonymous.As people investing in Bitcoin like that the value of bitcoin is rising.Now answering to your question that why it is increasing day by day who is increasing them simple is that think about your any asset of the market the price of which is increased when the demand of it is increased just like gold so the same is happening in bitcoin that with the demand the price of it is increased.
Thank you, this made a lot of sense.
But a hypothetical question does arise from it, what if people stop using these exchanges at all, so all 100% of bitcoin circulation is done peer to peer, so will the display of bitcoin value on 3rd party sites or exchanges will be static from that point when last transaction were made from there?
And how will the value change from that point on wards? I think every owner would be entitled to sell at any value they wish, right? Of course if someone is willing to buy at that value.
But a hypothetical question does arise from it, what if people stop using these exchanges at all, so all 100% of bitcoin circulation is done peer to peer, so will the display of bitcoin value on 3rd party sites or exchanges will be static from that point when last transaction were made from there?
And how will the value change from that point on wards? I think every owner would be entitled to sell at any value they wish, right? Of course if someone is willing to buy at that value.
The setting up of these exchanges definitely spur the valuation of Bitcoin as a commodity/asset, but value is always assigned to it. Imagine in the beginning, people selling Bitcoins on this forum (refer to pizza day) - 10,000 BTC was worth 2 pizzas and around the same time people were also selling the same amount, asking for $50 or so.
The more people put a value to Bitcoin, the more others will acknowledge that value - even without a formal market or exchange.
As examples, you can see several alts or tokens sold/bought on this forum, where there aren't any exchanges trading them (Blackbytes I believe still exists like this).
The price of Bitcoin is partialy determined with the ratio of supply and demand and trading is often done through exchangers so they are monitoring and updating the price. But the value varies from one exchanger to another and it's good to monitor few of them if you want the information about price movement.
though you can (and should) hold bitcoin on your own private key using bitcoin software. people deposit funds into third party services(exchanges) and then trade on exchanges.*
doing trades using bitcoin software where the funds are on your own private key are peer-to-peer and do not contribute to the price 'value'
by doing trades using exchanges the funds are on the exchanges private keys, meaning you have to trust the exchange is ethical/moral/legit to not disappear with your funds. but the advantage is your trades do contribute to the price 'value'
the price "value" is measured by the buy/sells done on these exchanges.
this value is not a real value of all coins. but the value of the current prices certain amount of coins are bought/sold at, at the time.
some exchanges only handle buy/sell between people of 0.00xx coins at any time, some buy/sell xx.xx coins at any time. but exchanges do not show the 'trades' of all coins in circulation, just the trades done between people in that exchange
there are multiple exchanges. and also multiple sites which may vary in 'value' because they are separate from each other (have their own orders) generally though exchanges respond like sheep if they see one exchange move in a certain direction or another exchange move in another direction thus the prices do end up being quite similar
some sites get the data from each exchange and then averages the trades of the exchanges these are usually just value estimator sites which dont do any trading and only purpose is to display an average value.
but remember when you see a price of $XXXX it does not mean there are $xxxx stored in bank accounts to back every single bitcoin in circulation.
it is just a display of the latest price a bitcoin has been bought/sold on an exchange. or just a display of the average of multiple exchanges.
do not take much notice of the "market cap" as that is just a multiplication of the average buy/sell of a current order.. and not to be thought of as the amount of real $$$ that is invested.
doing trades using bitcoin software where the funds are on your own private key are peer-to-peer and do not contribute to the price 'value'
by doing trades using exchanges the funds are on the exchanges private keys, meaning you have to trust the exchange is ethical/moral/legit to not disappear with your funds. but the advantage is your trades do contribute to the price 'value'
the price "value" is measured by the buy/sells done on these exchanges.
this value is not a real value of all coins. but the value of the current prices certain amount of coins are bought/sold at, at the time.
some exchanges only handle buy/sell between people of 0.00xx coins at any time, some buy/sell xx.xx coins at any time. but exchanges do not show the 'trades' of all coins in circulation, just the trades done between people in that exchange
there are multiple exchanges. and also multiple sites which may vary in 'value' because they are separate from each other (have their own orders) generally though exchanges respond like sheep if they see one exchange move in a certain direction or another exchange move in another direction thus the prices do end up being quite similar
some sites get the data from each exchange and then averages the trades of the exchanges these are usually just value estimator sites which dont do any trading and only purpose is to display an average value.
but remember when you see a price of $XXXX it does not mean there are $xxxx stored in bank accounts to back every single bitcoin in circulation.
it is just a display of the latest price a bitcoin has been bought/sold on an exchange. or just a display of the average of multiple exchanges.
do not take much notice of the "market cap" as that is just a multiplication of the average buy/sell of a current order.. and not to be thought of as the amount of real $$$ that is invested.
Thank you, this made a lot of sense.
But a hypothetical question does arise from it, what if people stop using these exchanges at all, so all 100% of bitcoin circulation is done peer to peer, so will the display of bitcoin value on 3rd party sites or exchanges will be static from that point when last transaction were made from there?
And how will the value change from that point on wards? I think every owner would be entitled to sell at any value they wish, right? Of course if someone is willing to buy at that value.
So to my understanding, bitcoin value goes up when the demand is high, and goes down when people sell bitcoin or dump as they usually call. (Do correct me if I'm wrong)
So the question is, who measures this? And who updates the bitcoin value, I mean as bitcoin is peer to peer, how can 3rd body be updating the value of bitcoin? By 3rd party I means the places where we go to see the value of bitcoin, whether its an exchange or preev.com whatever.
I don't understand, please do elaborate considering me a novice at this.
The one who updates bitcoin value is the system.There would be times that the bitcoin value will increase,and there would also be timea that the value of the bitcoin will decrease. So the question is, who measures this? And who updates the bitcoin value, I mean as bitcoin is peer to peer, how can 3rd body be updating the value of bitcoin? By 3rd party I means the places where we go to see the value of bitcoin, whether its an exchange or preev.com whatever.
I don't understand, please do elaborate considering me a novice at this.
I think that OP is talking about how does the stock market or other exchange sites are computing the current price of bitcoin or other commodities in the market,
Well just like in the Stock Exchange Indexes can be calculated not only for equity stock markets, but also for anything that trades on an exchange. You can have a currency index, a dividend index, a fixed income index, a hedge fund index, a volatility index, for energy markets oil, gas, electricity, for precious metals, other commodities,
And I think that these sites have a great deal in the program department and for me that have a small knowledge in the programming language can just answer you that these things are all automated and have a complicated algorithim.
Well just like in the Stock Exchange Indexes can be calculated not only for equity stock markets, but also for anything that trades on an exchange. You can have a currency index, a dividend index, a fixed income index, a hedge fund index, a volatility index, for energy markets oil, gas, electricity, for precious metals, other commodities,
And I think that these sites have a great deal in the program department and for me that have a small knowledge in the programming language can just answer you that these things are all automated and have a complicated algorithim.
Well, good explanation this is the complicated answer, but we can understand if we have a little bit of trading knowledge. I seriously don't know who will update the bitcoin value. I have a little bit of knowledge in share business, but I don't know the technical words what we call in the stock market. Anyway, finally, I understood that this is all automated and running with the complicated algorithm.
Well I don't really know if it is run by algorithm or a program language c++ thing, all I really know is if it is on a website it is made by programmers or a web developer to automatically run the calculations of the price index of bitcoin or other asset in the stock market, well we should ask a person that has high knowledge in the programming language and I just have a little amount knowledge in that aspect. It is just an opinion on how the stock market calculating and updating the price of the commodities or currencies.
I think that OP is talking about how does the stock market or other exchange sites are computing the current price of bitcoin or other commodities in the market,
Well just like in the Stock Exchange Indexes can be calculated not only for equity stock markets, but also for anything that trades on an exchange. You can have a currency index, a dividend index, a fixed income index, a hedge fund index, a volatility index, for energy markets oil, gas, electricity, for precious metals, other commodities,
And I think that these sites have a great deal in the program department and for me that have a small knowledge in the programming language can just answer you that these things are all automated and have a complicated algorithim.
Well just like in the Stock Exchange Indexes can be calculated not only for equity stock markets, but also for anything that trades on an exchange. You can have a currency index, a dividend index, a fixed income index, a hedge fund index, a volatility index, for energy markets oil, gas, electricity, for precious metals, other commodities,
And I think that these sites have a great deal in the program department and for me that have a small knowledge in the programming language can just answer you that these things are all automated and have a complicated algorithim.
Well, good explanation this is the complicated answer, but we can understand if we have a little bit of trading knowledge. I seriously don't know who will update the bitcoin value. I have a little bit of knowledge in share business, but I don't know the technical words what we call in the stock market. Anyway, finally, I understood that this is all automated and running with the complicated algorithm.
I think that OP is talking about how does the stock market or other exchange sites are computing the current price of bitcoin or other commodities in the market,
Well just like in the Stock Exchange Indexes can be calculated not only for equity stock markets, but also for anything that trades on an exchange. You can have a currency index, a dividend index, a fixed income index, a hedge fund index, a volatility index, for energy markets oil, gas, electricity, for precious metals, other commodities,
And I think that these sites have a great deal in the program department and for me that have a small knowledge in the programming language can just answer you that these things are all automated and have a complicated algorithim.
Well just like in the Stock Exchange Indexes can be calculated not only for equity stock markets, but also for anything that trades on an exchange. You can have a currency index, a dividend index, a fixed income index, a hedge fund index, a volatility index, for energy markets oil, gas, electricity, for precious metals, other commodities,
And I think that these sites have a great deal in the program department and for me that have a small knowledge in the programming language can just answer you that these things are all automated and have a complicated algorithim.
It's really amazing and astonishing matter that Bitcoin is updating in a regular basis, but Still it's a confusing matter how to update. So far I think that, there are some factors whose determines the value of bitcoin. but question is that, how it's going on and who is the behind person to operate this activity. From my point of view that This is alike conventional share which always leads its demand and supply curve...
I still also wonder how this happen but at the same time I think the way is determined is by the exchange site with their software they have installed to aggregate demands and supply in other to determine the price and because one individual can have accounts on several exchange sites, then the behaviour can be predicted across board and also with arbitrage trading and that js the reason why I think the price of different exchange sites is always close to each other while most other sites pick their quoted price from the average from reputable exchange sites
Basically this works like any other exchange/trading system... like shares or foreign currency exchange.
You have people who want to buy and people who want to sell... when you get a buyer and seller who agree on a price, that defines what the current value is. This value will generally shift based on supply and demand... if more people want to buy, and supply is low, the price will tend to increase as buyers "outbid" each other to try and get the limited supply.
When supply is high, and demand is low... price will tend to decrease as sellers "underbid" each other to try and get rid of their stock.
All the 3rd parties are doing is reporting either what the current buy/sell price is on their platform (for instance, in the case of exchanges like Poloniex or Bittrex)... or what is likely to be a weighted average from several sources (in the case of Google search or Preev). They do not set the value, they just report what bitcoins are currently being bought and sold for.
You have people who want to buy and people who want to sell... when you get a buyer and seller who agree on a price, that defines what the current value is. This value will generally shift based on supply and demand... if more people want to buy, and supply is low, the price will tend to increase as buyers "outbid" each other to try and get the limited supply.
When supply is high, and demand is low... price will tend to decrease as sellers "underbid" each other to try and get rid of their stock.
All the 3rd parties are doing is reporting either what the current buy/sell price is on their platform (for instance, in the case of exchanges like Poloniex or Bittrex)... or what is likely to be a weighted average from several sources (in the case of Google search or Preev). They do not set the value, they just report what bitcoins are currently being bought and sold for.
the same person who updates value of a sack of potato! potato is also peer to peer. the farmers mine i mean farm it each month and put that supply up for sale and the users or consumers or the demand goes and buys the potatoes from the market that they are selling it on.
if some year there is less rain and they canmine farm less potato the supply will go down and with the same demand price will go up.
if some year more people start eating potatoes the demand goes up and sinceminers farmers can not create more potatoes than their farm allows them to the supply remains the same and with increasing demand price of potato will go up.
now replace the words potato with bitcoin, supply is the coin they mine and the coin that is already in circulation and the limit is fixed by the protocol and the demand is the people buying bitcoin and either holding it as investment or using it as a currency to buy stuff.
if some year there is less rain and they can
if some year more people start eating potatoes the demand goes up and since
now replace the words potato with bitcoin, supply is the coin they mine and the coin that is already in circulation and the limit is fixed by the protocol and the demand is the people buying bitcoin and either holding it as investment or using it as a currency to buy stuff.
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