how to determine the price of bitcoin

# how to determine the price of bitcoin

Oleh: Muh. Sabri Rahman Pada 2015-12-28 20:54:04

Many people wonder how Bitcoin prices are determined. First of all, know that the workings of Bitcoin price movements are the same as currencies or other objects. Let's take an example of how the price of an object is determined - we can use oranges as a parable. What is the price of oranges?

The answer: depends. The first point in determining the price of oranges is the following two things: what price is desired by the person who sells it, and what price is desired by the person who bought it. If John wants to sell oranges for Rp. 3,000, and Sarah only wants to pay Rp. 2,000, - the deal doesn't happen. But if they agree with a certain price, for example IDR 2,500, the transaction will occur. In the summer, more people want to buy oranges, so the price of oranges rises. Or if there is a flood, the orange stock is reduced, but many people want to buy oranges, so prices will also increase.

Bitcoin and other currencies are slightly different from oranges because they are 'homogeneous' - one dollar is identical to another, as Bitcoin is identical to other Bitcoins. Oranges, on the other hand, can differ depending on the size and quality. In other words, it is easier to determine the price of Bitcoin or currency because of the identical nature.

Many people do not realize that other currencies also work exactly like Bitcoin - if you are holding coins or banknotes in your local currency in your hands right now, at the same time there are millions of people buying and selling your local currency, so even if you feel the price of your currency is stable, the price actually changes continuously. If you want to exchange your money into another local currency, for example for USD, today maybe you will pay with 10 pieces of your local currency, but the next day can be 11 or 9. Bitcoin works exactly like that - you can imagine it like any other type of currency than you have now.
There are many public misconceptions about the many uses of Bitcoin by criminals, but those thoughts are wrong thinking. This thinking is caused by the many people who think that Bitcoin is anonymous, when in fact Bitcoin is very contrary to that - all Bitcoin transactions are transparent and everyone in the world can see ongoing Bitcoin transactions. People may not be able to connect the identity of a particular individual to a Bitcoin transaction directly (this is why sometimes Bitcoin is also called pseudo anonymous), but if they find it, then they can see all the transactions that you have done on the Bitcoin network. This is why Bitcoin is the wrong way if you use it for things that are not right.

Although Bitcoin is probably the safest and not the most ugly way to use money, it doesn't mean that no criminal uses it. Just like normal money, there are jahat bad guys ’who use Bitcoin. But there are two important things that must be noted - first, because more and more data is available in this industry, the clearer the number of malicious cases, namely very, very small. If the Bitcoin ecosystem is likened to a large mountain, then the size of these evil parts is only a few lumps of rock. Second, in every financial system, this is a risk that cannot be eliminated and can only be reduced, and Bitcoin has the best tools in the world for that.

Bitcoin moves parallel to the internet in the context of all the 'bad things' that people attach to Bitcoin. Is the internet completely good? Certainly not. Terrorists, money laundering individuals, illegal drug smugglers use Facebook, Twitter and Whatsapp to communicate and coordinate every day. Some people may feel anxious that at least 5-30% of online traffic is related to pornography. We haven't even talked about the dark web, where all the bad things are.

But regardless of all these issues, do people make concrete efforts to ban the internet? Not. Not because it revokes and prohibits Bitcoin is difficult, but because the internet offers more positive things than negative things. For the same reason, we have to be more careful about our mindset of Bitcoin, because a lot of evidence has shown that Bitcoin brings many positive impacts, if not more, from the internet. Internet and Bitcoin are only devices that can be used by 'bad people' and 'good people'. Fortunately, this world is filled with more people in the 'good people' category.