Bitcoin: The Ultimate Guide to the World of Bitcoin, Bitcoin Mining, Bitcoin Investing, Blockchain Technology, Cryptocurrency (2nd Edition) by Ikuya Takashima

Author:Ikuya Takashima
Language: eng
Format: mobi, azw3, epub
Published: 2017-08-08T04:00:00+00:00

BitInstant’s other major investor, Wences Casares, an Argentine Fintech entrepreneur was a huge believer in Bitcoin, stating that it would be bigger than the Internet.

Casares family faced massive financial losses in Argentina due to deflation and devaluation of the Argentine Peso, and he felt that Bitcoin offered a solution to the volatile and incoherent nature of traditional currencies.

When Casares initially purchased Bitcoins, there was nowhere to store them. Accordingly, he created a vault comprising global servers where these could be stored. The servers were highly secure, had biometric access and were regularly filmed. The Meridian Insurance Group also insured the vault. Other Bitcoin enthusiasts and friends were interested in Casares vaults as a potential solution to their storage dilemmas. Accordingly, Casares founded Xapo, a startup that offered a Bitcoin ‘wallet’, substantially comprising the vaults that he had created.

More recently, there has been an increasing demand from China (although the Chinese government is now cracking down on Bitcoin & Cryptocurrencies) for Bitcoins to overcome the ban on Chinese money leaving the country, and the currency has hit a $4,280 high. The Renminbi has fallen 7% hinting at a potential negative correlation between the two currencies. With more and more people disillusioned by national currencies and the control governments have over them, Bitcoin is starting to look like a very viable alternative, with some treating the currency as a haven asset.

The currency also increased in value due to the 2016 demonetization of high-value notes in India and the capital controls imposed in Venezuela.

Fluctuation

The reason why the value of Bitcoin is subject to such change is that its value is based on that of its perceived “store of value” as opposed to being set against “fiat currencies.”

Fiat currency is a currency that is based upon and gets its value from government regulations and laws. Bitcoin is a currency that is not tied down to any form of fiat.

A “fiat” currency is a national currency that is regulated by governments, whereas a “store of value” currency is just like the name implies, a currency that is stored and can increase in value over time. This increase, however, depends on how much of it is in circulation, so Bitcoins store of value depends wholly on how much is being traded at the time.

Bitcoin is currently worth $4280. On average the exchange rate fluctuates from $0.01 to over $40 per BTC. This value is estimated to change soon. It is the fact that Bitcoins do not go through a centralized bank that is responsible for this fluctuation. Since there is so far, no printed currency for Bitcoin, there is no set relative value either. The value had some definite peaks, one of the biggest happened in the year 2011 when Bitcoin went from .005USD to $18.60001USD. And then buy October of 2012 Bitcoins had dropped once again down to a little over $12. These fluctuations have led some to claim that the value of Bitcoins is quite volatile.

But this is the nature of Bitcoins since it

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