Bitcoin is one of the world's most popular digital currencies, meaning that it is exclusively created and held electronically. But, what do we actually know about digital currencies and the potential of these currencies to replace conventional money?
Like conventional money, the major function of a digital currency is to serve as a means of payment, whether that is in exchange for goods or real currency, such as dollars and euros. In addition, similar to how a normal currency's exchange rate is set, the price for bitcoins - per the CoinDesk Bitcoin Price Index (XBP) - is based on market dynamics and expressed as the midpoint of the bid/ask spread. Bitcoin’s current value against the US dollar is of $453. The highest price for bitcoin since it was launched in 2009 was $1,147 in December 2013. After that spike, the price trended down to a 3-year low of $177 in January 2015. Bitcoin's price is gradually rebounding, buoyed by increased demand for the digital currency in China caused by the weakening yuan: digital currency, like gold, is a refuge for investors in the periods of uncertainty.
While the flow of a traditional currency is tracked by banks and controlled by governments, the circulation of digital currencies is decentralized, a key factor that drives expectations for the spread of bitcoin to new markets and transaction types. Even though traditional currencies now exist primarily on digital ledgers of banks like bitcoins, the ledger for bitcoins has no separate owner or regulator. Instead, bitcoin is maintained and updated by bitcoin users on the basis of the bitcoin protocol. Since the bitcoin network is not controlled by a single institution, it has several advantages over government-controlled currencies. These advantages include:
The anonymous nature of bitcoin, a byproduct of its decentralization, makes it a perfect tool for illegal activity. Examples include:
The taint of bitcoin and other virtual currencies by criminals' use of the currencies in illicit transactions coupled with the anonymity inherent to virtual currency fuels skepticism that virtual currency will achieve the level of acceptance of traditional currency much less replace it. Without meeting the essential prerequisite of trust in a currency, the widespread expansion remains doubtful.
Bitcoins in circulation - the total number of bitcoins that have already been mined; in other words, the current supply of bitcoins on the network.Market Capitalization - the total USD value of bitcoin supply in circulation, as calculated by the daily average market price across major exchanges.USD Exchange Trade Volume - the total USD value of trading volume on major bitcoin exchanges. See also: Bitcoin Price Index, 2009 to 2017
Historical daily, monthly and annual time series. USD, Euro, Japanese yen, Chinese Yuan and other curencies Changes of exchange rates reflect movements of the currency exchange market, that is the interaction between supply and demand for currency units. Increased demand for national currency unit is caused by an increase in demand for national exported goods and services and leads to appreciation of national currency unit. Thus, exchange rate is an important indicator of international trade. See also: Agriculture | Commodities | Demographics | Economics | Education | Energy | Environment | Exchange Rates | Food Security | Foreign...
The Economist has recently updated its famous “Big Mac Index” based on McDonald’s Big Mac prices, collected throughout the world. Now the cheapest burgers in US Dollar terms can be bought in Ukraine: for $1.2 only. The most expensive ones are being sold in Switzerland, where you should pay $7.54 for one burger. Big Mac Index shows, how much the national currency is “undervalued” or “overvalued” in relation to “fair” Big Mac price. In respond to the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones, it was adjusted for differences in countries' GDP per capita. E. g., in case of Russia,...