2017 is the year most users of coin cryptocurrency, but most of them only know the benefits and how to use it. They barely know the workings of cryto or Bitcoin, not even knowing how the price of a coin is determined. I'll explain a little early:
How is the Bitcoin price determined?
Previously, know that Bitcoin price action works just like a currency or other object. Let's take an example of how the price of an object is determined, we can use the Aple as a parable.
What is the price of the Aple?
The first point of Aple pricing is with the following two things:
- How much does a person want to sell? and
- How much is the price desired by the person who bought it?
Ex: If @yandot wants to sell Aple for $3.00 and @arie.steem is only willing to pay $2.00 then the deal does not happen. But if they agree with a certain price, for example $2.50 then the transaction occurs. In July, August, September, and October the condition of apples in the farmers' gardens is somewhat reduced, so the price of Apples goes up. Or if there is a flood so the supply of oranges is reduced, but many people want to buy Apple, then the price will also rise.
Bitcoin and other currencies are slightly different from Apples because they are 'homogeneous', one dollar identical to another dollar, like Bitcoin identical to other Bitcoin. Apples, on the other hand, may differ depending on size and quality. In other words, it is easier to determine the price of Bitcoin or currency because of its identical properties.
Conclusion
Many people do not realize that other currencies are also working exactly like Bitcoin, if you are holding a coin or banknote in your local currency in your hands right now, at the same time there are millions of people selling your local currency, so even if you feel the price of your currency is stable, actually the price is changing continuously.
If you want to redeem your money into another local currency, say for USD, today you may pay with your 10 local currency, but on the next day it could be 11 or 9. Bitcoin works exactly like that, you can imagine it like any other kind of currency than what you have right now.