Bitcoin exchange rate explained sum

One is the size of the block in Bitcoin's blockchain, which is limiting the number of transactions that can go through at any given time. Bitcoin's network is powered by miners, people and companies who use a tremendous amount of computing power to create new bitcoins. And when there's too many transactions to process—which currently happens very often—miners will prioritize transactions that pay a higher fee.

The situation improved with the recent SegWit upgrade of the Bitcoin software, but it will take a while—weeks or months—before users start seeing benefits of SegWit. Another reason is Bitcoin Cash, a competing cryptocurrency that split off from Bitcoin on August 1.

Since the two cryptocurrencies are similar, it's simple for miners to switch from mining Bitcoin to Bitcoin Cash. And for reasons explained here , sometimes it's more profitable to mine Bitcoin Cash than Bitcoin.

Whenever miners start switching to Bitcoin Cash, Bitcoin's network becomes slower, and transaction fees rise; we've seen this swing happen a couple of times before and it's likely to keep happening for a while.

This is not good for Bitcoin. A few bucks or even a few dozen bucks per transaction isn't a deal breaker for investors, but for someone who wants to use Bitcoin as payment—which is kind of the point of Bitcoin in the first place—that's far too expensive. The good news is that the fees are likely to get better. The bad news is that it won't happen very soon. SegWit has paved the way for a further upgrade called the Lightning Network , which should vastly reduce fees, but the software, or even its specifications, aren't ready yet.

This will reduce strain on the network and make transaction fees lower, but switching to SegWit2x requires a so-called hard fork, meaning that Bitcoin is once again splitting into two, which could bring new trouble. Luckily, Bitcoin users aren't completely without options right now. One thing you can do is wait until the network is less strained at night, during the weekend , which is when transaction fees will go down.

You can also check this service to see which transaction fees are currently the most economic for you. At the time of this writing, a Bitcoin fee of satoshis per byte will be enough for your transaction to go through in about 30 minutes Bitcoin transaction fees are expressed in satoshis , which is one hundred millionth of a Bitcoin, per byte size of the transaction, which is typically a little over bytes.

Have in mind that fee estimators aren't perfect; an alternative service that shows you the currently optimal fee is this one. Paying a fee that's too high is unnecessary, as it doesn't carry any additional benefit. But paying too small a fee means your transaction won't go through fast, or at all. This information won't help you much if you use a wallet that doesn't let you change transaction fees, so maybe it's time to switch to a different wallet.

For example, a mobile Bitcoin wallet called Mycelium offers several possibilities for Bitcoin transaction fees: The French tried assignats in the revolution — property claims on land aided by Madam La Guillotine disposing of rival claims. And as JK Galbraith pointed out, tobacco had a longer run in the southern US as a monetary base than either silver or gold — the main problem was that it was hard to control the money supply as it was easy to pass other weeds off as tobacco. The base money for well over a thousand years before coins were invented was the IOU, mostly but not always denoted in some common unit.

And this continues to be the usual form of money. The medieval villager had a tab at the mill and a tally-stick for the royal taxes. The medieval merchant settled accounts at the great fairs by netting out debts, then accepting an IOU or coin for the balance depending on his assessment of creditworthiness. We do it with a letter of credit and a set of accounts at central banks.

My own sense is that the final? That way the whole volatility and speculation issue could have been avoided. Does anyone have an explanation why they chose this route, unless volatility and speculation were intended by design? I can buy and sell gold online at WAY more places than bitcoin. Maybe someday botcoins of some sort will have the social construction behind them that gold does, but gold is so much easier for a human to grasp as it were.

Dollars are a social construction that owns an army and a navy and so will have legs for now. Wouldnt the right headline be negative sum game? Theres also a sentence repetition: Unfortunately for Bitcoin fans, the chances of this happening are a lot less than five to one. Because if you use dollars, you have to comply with US law including all the know-your-customer reporting that bitcoin is designed to avoid: Yes, bitcoins can function as a medium of exchange.

The important function of a monetary unit is as a stable counter for credit transactions. You can sell many things online whether it be gold, used laptops, furniture etc. MPAVictoria please explain how I can use a piece of gold that I have in my house to buy something from someone on the other side of the world without leaving my house.

Scott P; again, so what? Gold is not today money. It is still a significant asset class. Is this because investors are attracted to its shiny yellow lustre? Or because they choose investments on the basis of jewellery-convertibility?

Indeed the change in the value of crypto currencies since Prof Quiggin first predicted a bitcoin price of zero is the manifestation of this evolving social construction. Demanding bitcoin an entirely safe to them way of making their victims squirm; is it not possible that some would do this more or less for sick fun? Hence yet more incentive for hackers to launch bitcoin based ransomware attacks…. I doubt the equilibrium of this is truly zero value.

Wildly impractical, but theoretically possible? Coinlove, so colorably the equivalent of acquiring an army. Or to put it differently, they could call it whatever they want but specify in advance a fixed exchange rate with an existing currency, or hwy not with gold.

This should have no implications for its legal status. Just a tiny bit. Obviously bitcoin etc is not issued by any state and does not settle liabilities to any state. They lack this critical property that would make them resemble cash-money. Why is gold stored in bank vaults and not other things used to make jewelry?

Accordingly, some of the math majors around this might be able to explain in more detail, adding it to almost any portfolio reduces its volatility and can increase its expected risk adjusted return though not necessarily its absolute return.

This is despite gold being fundamentally a negative yielding asset i. Right now Bitcoin would add volatility to nearly any possible portfolio and adding volatility via a negative return asset reduces expected risk adjusted returns across nearly any portfolio — no one would want that, so for now, it remains an inferior asset.

Proponents will only be right if a decided majority agrees they are right like a fandom …. The existence of a cheaper imperfect substitute stabilises the price of the preferred-but-expensive option, and this effect is very big with gold.

How do you conclude on how much value jewelry and industrial uses drive the price of gold? But brass and gold are both shiny and the phenomenon you describe should have a stabilizing effect on both prices at least relative to each other. Also if gold has a high own-price elasticity of demand I think you mean the demand curve is nearly horizontal not nearly vertical. Not forgetting the political difficulties in such migration.

Rather less durable than dollar-like currency I would think, and useful or not gold will at least always be gold. Gold is not just shiny but highly malleable and ductile, which accounts for the eagerness with which it has traditionally been sought as a jewellery item. Stimulated, as the soccer players call it. Gold price is stable.

If you understand how, great. Nobody needs your understanding to keep things going. In addition to the points John made, there is the fact that brass tarnishes and can even corrode — and can sometimes leave a residue on your skin — while gold does not. That tells me by difference the price associated with industrial and jewelry usage. What happens however as the gold price rises is the supply that comes from recycled gold goes up. We can see this with other asset-classes as well, although I cfb digging up details for you for reasons, that strike me as adequate.

And another fact based on the press is that major banks are accumulating bitcoin without the slightest speculative motive, but as insurance. I have no bitcoin or cryptocoin, and no interest in such, but to the contrary am scared that neglect threatens society. In addition to the points John made, there is the fact that brass tarnishes and can even corrode …. Allow yourself to learn from other people by allowing them the chance to show you your mistakes. Home Comments policy Subscribe.