Do you know what is a bitcoin? It is a virtual currency .The value of bitcoin, the virtual currency that came into circulation in 2009, has almost doubled in the last three months. In November, it broke the $ 500 mark for the first time since August 2014. This rise will not stop anytime soon, says Business Insider in an article dated December 23.
Daniel Masters, co-founder of the Global Advisors Investment Fund, a multi-million dollar investment in the bitcoin ecosystem, says the value of digital money could soar in 2016. It could even surpass $ 1100 . According to this former commodity trading specialist, who started his career at Shell , a bitcoin could even be worth 4400 dollars at the end of 2017.
THE MOST USED BITCOIN
This flight of prices is linked to the simple mechanism of supply and demand, stresses the American site. Bitcoin is expected to attract more users as cryptocurrency is accepted as a means of payment by a growing number of companies. The banks’ growing interest in blockchain technology, which underpins bitcoin, is also likely to lead to an upward climb.
In addition, the issuance of this digital currency is not controlled by any central bank. Computers (often in a network) are competing to solve a mathematical problem, to the random solution. Whoever finds it rents 25 new bitcoins. The challenge then starts again.
THE ISSUANCE OF NEW BITCOINS INCREASINGLY LIMITED
But the creator of bitcoin, the mysterious Satoshi Nakamoto , has decided to reduce every four years of half the reward offered to the winner, to limit the inflation of its currency. From July 2016 until 2020, every computer that finds the solution to the mathematical problem will only touch 12.5 bitcoins. In around 2040, the maximum limit of 21 million bitcoins in circulation, decided by Satoshi Nakamoto, will have been reached.
If ever the Organization of Petroleum Producing Countries (OPEC) declared overnight that it would halve the number of barrels put on the market within two months, prices would flare up (except perhaps in the current context chronic weakness of oil prices …). It’s the same for bitcoin, says Daniel Masters, except that as the market is younger, the increase in the value of the currency will be more progressive.
The reward had already been lowered by two first time in November 2012, from 50 to 25 bitcoins. The value of the cryptocurrency was then very low, around 12 dollars per unit, but it had exploded by 150% in the seven months preceding the cut, about the time remaining before July 2016 …
