The Rise of Bitcoin
Ambalika Gupta, Kamala Nehru College, University of Delhi, ambalika.gupta.11@gmail.com
1. Introduction
Bitcoin is digital money used for secure and instant transfer of value anywhere in the world. It is not controlled or issued by any bank or government - instead it is an open network which is managed by its users. Much in the way email improved communication by making it fast and cheap, bitcoin is . Anybody, so long as you have really fast computers, a lot of electricity and a desire to solve puzzles. The transaction data in each batch is encrypted by a formula that can be unlocked only through trial-and-error guessing on a massive scale.The miners put large-scale computing power to work as they compete to be the first to solve it. If a miner’s answer is verified by others, the data is added to a linked chain of blocks of data and the miner is rewarded with newly issued bitcoin.Unlike credit card networks like Visa and payment processors like Paypal, bitcoin is not owned by an individual or company. Bitcoin is the world’s first completely open payment network which anyone with an internet connection can participate in.an improvement on existing payment methods which were not designed for the internet era.Bitcoin was invented by Satoshi Nakamoto in 2009. Bitcoin is a digital cryptocurrency and payment system that is entirely decentralized, meaning it is based on peerto-peer transactions with no bureaucratic oversight.Transactions and liquidity within the network are instead based on cryptography.
2. Overview of the Study
The skyhigh rise of “Bitcoin” has everyone wondering. It started as a phenomenon sometime back. Bitcoin prices are at an all-time high. Like it, love it, or confused by it, bitcoin and other cryptocurrencies have become impossible to ignore. Indeed the price of Bitcoin has hit a new high, flirting near 3,500 dollar a token and reaching a market cap of $55 billion for the first time ever. That’s nearly the size of Luxembourg’s GDP.The real question is “But amid all the partying, the sheer incongruity of this price rise appears to have struck almost no-one. Why are people who want cryptocurrencies to replace fiat currencies such as the U.S. dollar rejoicing because they are making profits in U.S. dollars?” To profit from Bitcoin’s price rise, you must convert it to fiat currency. Since all cryptocurrencies are rising in price versus the U.S. dollar, there is little profit to be made by exchanging Bitcoin for other cryptocurrencies. You can only realize profits from Bitcoin’s price rise versus U.S. dollars if you exchange it for U.S. dollars. Investing in Bitcoin - or simply holding the digital currencies - could provide these investors with more returns.However, it could also be a trap, causing these market participants to suffer sharp losses.
3. An empirical field study of rising value of Bitcoin over time with increasing market price of Bitcoin.
3.1 Overview
The value of BTC is merely based on the law of supply and demand. The financial performance of a company (ie. its earnings) is the independent variable that affects the price of its stock. Similiarly, the rising value of market value of Bitcoin is affecting the market price of across major Bitcoin exchanges.
Hypothesis H1a: There is a sharp increase in the market price of Bitcoin the second half of data.
Hypothesis H1b: There might be a positive association between the stock price and the amount of the stock purchased.
3.2 Data
For this study, we collected data from Kaggle datasets. (https://www.kaggle.com/sudalairajkumar/cryptocurrencypricehistory). which further has been taken from “coinmarketcap”" and it is free to use the data.Bitcoin dataset is originally obtained from Blockchain Info. These features include concepts like the market capitalization of Bitcoin as well as the relationship of Bitcoin transaction volume to USD volume
Blocks are files where data pertaining to the Bitcoin network is permanently recorded. A block records some or all of the most recent Bitcoin transactions that have not yet entered any prior blocks. … A block is thus a permanent store of records which, once written, cannot be altered or removed.
bitcoin.df <- read.csv(paste("bitcoin_dataset.csv", sep="/"), stringsAsFactors = FALSE)summary(bitcoin.df)## Date btc_market_price btc_total_bitcoins
## Length:2641 Min. : 0.061 Min. : 3744250
## Class :character 1st Qu.: 10.938 1st Qu.: 9170575
## Mode :character Median : 241.135 Median :12575762
## Mean : 521.868 Mean :11884879
## 3rd Qu.: 587.875 3rd Qu.:15094069
## Max. :7437.543 Max. :16669275
## NA's :1 NA's :1
## btc_market_cap btc_trade_volume btc_blocks_size
## Min. :2.393e+05 Min. :4.100e+01 Min. : 1
## 1st Qu.:9.517e+07 1st Qu.:4.107e+05 1st Qu.: 1331
## Median :3.433e+09 Median :1.081e+07 Median : 16485
## Mean :8.063e+09 Mean :3.499e+07 Mean : 33957
## 3rd Qu.:7.872e+09 3rd Qu.:2.764e+07 3rd Qu.: 55294
## Max. :1.240e+11 Max. :1.267e+09 Max. :140295
## NA's :1 NA's :22 NA's :1
## btc_avg_block_size btc_n_orphaned_blocks btc_n_transactions_per_block
## Min. :0.0004342 Min. :0.0000 Min. : 1.0
## 1st Qu.:0.0678815 1st Qu.:0.0000 1st Qu.: 157.8
## Median :0.2116168 Median :0.0000 Median : 392.0
## Mean :0.3517627 Mean :0.4008 Mean : 673.8
## 3rd Qu.:0.6627129 3rd Qu.:0.0000 3rd Qu.:1202.5
## Max. :1.0466060 Max. :7.0000 Max. :2436.1
## NA's :1 NA's :1 NA's :1
## btc_median_confirmation_time btc_hash_rate btc_difficulty
## Min. : 0.000 Min. : 0 Min. :5.120e+02
## 1st Qu.: 6.596 1st Qu.: 13 1st Qu.:1.778e+06
## Median : 8.017 Median : 42303 Median :5.007e+09
## Mean : 7.886 Mean : 916748 Mean :1.215e+11
## 3rd Qu.:10.269 3rd Qu.: 888246 3rd Qu.:1.130e+11
## Max. :47.733 Max. :12999790 Max. :1.450e+12
## NA's :1 NA's :1 NA's :1
## btc_miners_revenue btc_transaction_fees btc_cost_per_transaction_percent
## Min. : 338 Min. : 0.00 Min. : 0.1365
## 1st Qu.: 67607 1st Qu.: 11.35 1st Qu.: 1.1780
## Median : 913399 Median : 22.28 Median : 2.3508
## Mean : 1416854 Mean : 50.57 Mean : 5.7488
## 3rd Qu.: 1797487 3rd Qu.: 48.63 3rd Qu.: 4.9938
## Max. :15347363 Max. :668.13 Max. :143.1794
## NA's :1 NA's :1 NA's :1
## btc_cost_per_transaction btc_n_unique_addresses btc_n_transactions
## Min. : 0.1349 Min. : 284 Min. : 268
## 1st Qu.: 4.9231 1st Qu.: 23771 1st Qu.: 22654
## Median : 8.0299 Median :139653 Median : 64815
## Mean :12.9189 Mean :189384 Mean :102029
## 3rd Qu.:14.2745 3rd Qu.:353866 3rd Qu.:185619
## Max. :90.2021 Max. :733878 Max. :369098
## NA's :1 NA's :1 NA's :1
## btc_n_transactions_total btc_n_transactions_excluding_popular
## Min. : 104808 Min. : 268
## 1st Qu.: 3812718 1st Qu.: 9806
## Median : 35818340 Median : 57361
## Mean : 66201394 Mean : 93997
## 3rd Qu.:104150558 3rd Qu.:181323
## Max. :269460981 Max. :361974
## NA's :1 NA's :1
## btc_n_transactions_excluding_chains_longer_than_100 btc_output_volume
## Min. : 235 Min. : 17623
## 1st Qu.: 9844 1st Qu.: 585606
## Median : 36871 Median : 1160942
## Mean : 62872 Mean : 1640595
## 3rd Qu.:111758 3rd Qu.: 2039087
## Max. :286896 Max. :45992223
## NA's :1 NA's :1
## btc_estimated_transaction_volume btc_estimated_transaction_volume_usd
## Min. : 6221 Min. :5.270e+02
## 1st Qu.: 110172 1st Qu.:1.643e+06
## Median : 184407 Median :4.156e+07
## Mean : 215136 Mean :1.243e+08
## 3rd Qu.: 262853 3rd Qu.:1.272e+08
## Max. :5825066 Max. :2.396e+09
## NA's :1 NA's :1library(psych)
describe(bitcoin.df)## Warning in describe(bitcoin.df): NAs introduced by coercion## Warning in FUN(newX[, i], ...): no non-missing arguments to min; returning
## Inf## Warning in FUN(newX[, i], ...): no non-missing arguments to max; returning
## -Inf## vars n mean
## Date* 1 2641 NaN
## btc_market_price 2 2640 5.218700e+02
## btc_total_bitcoins 3 2640 1.188488e+07
## btc_market_cap 4 2640 8.063468e+09
## btc_trade_volume 5 2619 3.498993e+07
## btc_blocks_size 6 2640 3.395685e+04
## btc_avg_block_size 7 2640 3.500000e-01
## btc_n_orphaned_blocks 8 2640 4.000000e-01
## btc_n_transactions_per_block 9 2640 6.737900e+02
## btc_median_confirmation_time 10 2640 7.890000e+00
## btc_hash_rate 11 2640 9.167476e+05
## btc_difficulty 12 2640 1.215208e+11
## btc_miners_revenue 13 2640 1.416854e+06
## btc_transaction_fees 14 2640 5.057000e+01
## btc_cost_per_transaction_percent 15 2640 5.750000e+00
## btc_cost_per_transaction 16 2640 1.292000e+01
## btc_n_unique_addresses 17 2640 1.893844e+05
## btc_n_transactions 18 2640 1.020290e+05
## btc_n_transactions_total 19 2640 6.620139e+07
## btc_n_transactions_excluding_popular 20 2640 9.399701e+04
## btc_n_transactions_excluding_chains_longer_than_100 21 2640 6.287178e+04
## btc_output_volume 22 2640 1.640595e+06
## btc_estimated_transaction_volume 23 2640 2.151358e+05
## btc_estimated_transaction_volume_usd 24 2640 1.242792e+08
## sd
## Date* NA
## btc_market_price 9.699400e+02
## btc_total_bitcoins 3.649081e+06
## btc_market_cap 1.609682e+10
## btc_trade_volume 8.636591e+07
## btc_blocks_size 3.993538e+04
## btc_avg_block_size 3.400000e-01
## btc_n_orphaned_blocks 8.800000e-01
## btc_n_transactions_per_block 6.548400e+02
## btc_median_confirmation_time 4.710000e+00
## btc_hash_rate 1.871301e+06
## btc_difficulty 2.456113e+11
## btc_miners_revenue 2.056449e+06
## btc_transaction_fees 8.144000e+01
## btc_cost_per_transaction_percent 1.091000e+01
## btc_cost_per_transaction 1.353000e+01
## btc_n_unique_addresses 1.872798e+05
## btc_n_transactions 9.746340e+04
## btc_n_transactions_total 7.573261e+07
## btc_n_transactions_excluding_popular 9.865686e+04
## btc_n_transactions_excluding_chains_longer_than_100 6.611812e+04
## btc_output_volume 2.345793e+06
## btc_estimated_transaction_volume 2.765441e+05
## btc_estimated_transaction_volume_usd 2.497613e+08
## median
## Date* NA
## btc_market_price 2.411300e+02
## btc_total_bitcoins 1.257576e+07
## btc_market_cap 3.432534e+09
## btc_trade_volume 1.080980e+07
## btc_blocks_size 1.648500e+04
## btc_avg_block_size 2.100000e-01
## btc_n_orphaned_blocks 0.000000e+00
## btc_n_transactions_per_block 3.920000e+02
## btc_median_confirmation_time 8.020000e+00
## btc_hash_rate 4.230261e+04
## btc_difficulty 5.006861e+09
## btc_miners_revenue 9.133988e+05
## btc_transaction_fees 2.228000e+01
## btc_cost_per_transaction_percent 2.350000e+00
## btc_cost_per_transaction 8.030000e+00
## btc_n_unique_addresses 1.396530e+05
## btc_n_transactions 6.481450e+04
## btc_n_transactions_total 3.581834e+07
## btc_n_transactions_excluding_popular 5.736100e+04
## btc_n_transactions_excluding_chains_longer_than_100 3.687100e+04
## btc_output_volume 1.160942e+06
## btc_estimated_transaction_volume 1.844070e+05
## btc_estimated_transaction_volume_usd 4.155730e+07
## trimmed
## Date* NaN
## btc_market_price 2.921800e+02
## btc_total_bitcoins 1.218452e+07
## btc_market_cap 4.137443e+09
## btc_trade_volume 1.499827e+07
## btc_blocks_size 2.722170e+04
## btc_avg_block_size 3.200000e-01
## btc_n_orphaned_blocks 1.700000e-01
## btc_n_transactions_per_block 5.943900e+02
## btc_median_confirmation_time 7.830000e+00
## btc_hash_rate 4.214968e+05
## btc_difficulty 5.631057e+10
## btc_miners_revenue 9.752063e+05
## btc_transaction_fees 3.054000e+01
## btc_cost_per_transaction_percent 3.200000e+00
## btc_cost_per_transaction 1.018000e+01
## btc_n_unique_addresses 1.666998e+05
## btc_n_transactions 9.040423e+04
## btc_n_transactions_total 5.343689e+07
## btc_n_transactions_excluding_popular 8.115738e+04
## btc_n_transactions_excluding_chains_longer_than_100 5.307862e+04
## btc_output_volume 1.296439e+06
## btc_estimated_transaction_volume 1.877909e+05
## btc_estimated_transaction_volume_usd 6.239433e+07
## mad
## Date* NA
## btc_market_price 3.478100e+02
## btc_total_bitcoins 4.173649e+06
## btc_market_cap 5.011027e+09
## btc_trade_volume 1.563971e+07
## btc_blocks_size 2.393880e+04
## btc_avg_block_size 2.900000e-01
## btc_n_orphaned_blocks 0.000000e+00
## btc_n_transactions_per_block 5.159400e+02
## btc_median_confirmation_time 2.640000e+00
## btc_hash_rate 6.271782e+04
## btc_difficulty 7.423170e+09
## btc_miners_revenue 1.264751e+06
## btc_transaction_fees 2.353000e+01
## btc_cost_per_transaction_percent 2.100000e+00
## btc_cost_per_transaction 5.650000e+00
## btc_n_unique_addresses 1.835703e+05
## btc_n_transactions 8.545855e+04
## btc_n_transactions_total 5.059779e+07
## btc_n_transactions_excluding_popular 7.649178e+04
## btc_n_transactions_excluding_chains_longer_than_100 4.526674e+04
## btc_output_volume 1.024690e+06
## btc_estimated_transaction_volume 1.129699e+05
## btc_estimated_transaction_volume_usd 6.058451e+07
## min
## Date* Inf
## btc_market_price 0.06
## btc_total_bitcoins 3744250.00
## btc_market_cap 239284.55
## btc_trade_volume 41.06
## btc_blocks_size 1.00
## btc_avg_block_size 0.00
## btc_n_orphaned_blocks 0.00
## btc_n_transactions_per_block 1.00
## btc_median_confirmation_time 0.00
## btc_hash_rate 0.00
## btc_difficulty 511.77
## btc_miners_revenue 337.89
## btc_transaction_fees 0.00
## btc_cost_per_transaction_percent 0.14
## btc_cost_per_transaction 0.13
## btc_n_unique_addresses 284.00
## btc_n_transactions 268.00
## btc_n_transactions_total 104808.00
## btc_n_transactions_excluding_popular 268.00
## btc_n_transactions_excluding_chains_longer_than_100 235.00
## btc_output_volume 17622.84
## btc_estimated_transaction_volume 6221.00
## btc_estimated_transaction_volume_usd 527.00
## max
## Date* -Inf
## btc_market_price 7.437540e+03
## btc_total_bitcoins 1.666928e+07
## btc_market_cap 1.240000e+11
## btc_trade_volume 1.267435e+09
## btc_blocks_size 1.402946e+05
## btc_avg_block_size 1.050000e+00
## btc_n_orphaned_blocks 7.000000e+00
## btc_n_transactions_per_block 2.436070e+03
## btc_median_confirmation_time 4.773000e+01
## btc_hash_rate 1.299979e+07
## btc_difficulty 1.450000e+12
## btc_miners_revenue 1.534736e+07
## btc_transaction_fees 6.681300e+02
## btc_cost_per_transaction_percent 1.431800e+02
## btc_cost_per_transaction 9.020000e+01
## btc_n_unique_addresses 7.338780e+05
## btc_n_transactions 3.690980e+05
## btc_n_transactions_total 2.694610e+08
## btc_n_transactions_excluding_popular 3.619740e+05
## btc_n_transactions_excluding_chains_longer_than_100 2.868960e+05
## btc_output_volume 4.599222e+07
## btc_estimated_transaction_volume 5.825066e+06
## btc_estimated_transaction_volume_usd 2.396482e+09
## range skew
## Date* -Inf NA
## btc_market_price 7.437480e+03 3.70
## btc_total_bitcoins 1.292503e+07 -0.54
## btc_market_cap 1.239998e+11 3.80
## btc_trade_volume 1.267435e+09 5.79
## btc_blocks_size 1.402936e+05 1.15
## btc_avg_block_size 1.050000e+00 0.69
## btc_n_orphaned_blocks 7.000000e+00 2.62
## btc_n_transactions_per_block 2.435070e+03 0.85
## btc_median_confirmation_time 4.773000e+01 0.23
## btc_hash_rate 1.299979e+07 2.90
## btc_difficulty 1.450000e+12 2.83
## btc_miners_revenue 1.534703e+07 3.10
## btc_transaction_fees 6.681300e+02 3.24
## btc_cost_per_transaction_percent 1.430400e+02 4.85
## btc_cost_per_transaction 9.007000e+01 2.03
## btc_n_unique_addresses 7.335940e+05 0.79
## btc_n_transactions 3.688300e+05 0.85
## btc_n_transactions_total 2.693562e+08 1.16
## btc_n_transactions_excluding_popular 3.617060e+05 0.88
## btc_n_transactions_excluding_chains_longer_than_100 2.866610e+05 1.08
## btc_output_volume 4.597460e+07 8.59
## btc_estimated_transaction_volume 5.818845e+06 11.50
## btc_estimated_transaction_volume_usd 2.396482e+09 3.88
## kurtosis se
## Date* NA NA
## btc_market_price 15.52 1.888000e+01
## btc_total_bitcoins -0.83 7.102014e+04
## btc_market_cap 16.16 3.132840e+08
## btc_trade_volume 47.72 1.687620e+06
## btc_blocks_size 0.09 7.772400e+02
## btc_avg_block_size -1.01 1.000000e-02
## btc_n_orphaned_blocks 7.53 2.000000e-02
## btc_n_transactions_per_block -0.61 1.274000e+01
## btc_median_confirmation_time 2.33 9.000000e-02
## btc_hash_rate 8.94 3.642015e+04
## btc_difficulty 8.35 4.780204e+09
## btc_miners_revenue 12.04 4.002358e+04
## btc_transaction_fees 12.09 1.590000e+00
## btc_cost_per_transaction_percent 31.48 2.100000e-01
## btc_cost_per_transaction 4.20 2.600000e-01
## btc_n_unique_addresses -0.62 3.644930e+03
## btc_n_transactions -0.56 1.896880e+03
## btc_n_transactions_total 0.17 1.473944e+06
## btc_n_transactions_excluding_popular -0.61 1.920110e+03
## btc_n_transactions_excluding_chains_longer_than_100 -0.08 1.286820e+03
## btc_output_volume 114.23 4.565494e+04
## btc_estimated_transaction_volume 177.15 5.382230e+03
## btc_estimated_transaction_volume_usd 18.82 4.860972e+06attach(bitcoin.df)3.3 Model
In order to test Hypothesis 1a & 1b, we proposed the following model:
\[BTCMktPrice= \alpha_0 + \alpha_1 BTCValue + \alpha_2 Total Transactions + \epsilon\]
Regression Model:-
mod<-lm(btc_market_price~btc_market_cap + btc_n_transactions + btc_miners_revenue, data=bitcoin.df)
summary(mod)##
## Call:
## lm(formula = btc_market_price ~ btc_market_cap + btc_n_transactions +
## btc_miners_revenue, data = bitcoin.df)
##
## Residuals:
## Min 1Q Median 3Q Max
## -191.008 -11.272 -7.069 12.177 265.881
##
## Coefficients:
## Estimate Std. Error t value Pr(>|t|)
## (Intercept) 1.165e+01 8.289e-01 14.055 < 2e-16 ***
## btc_market_cap 5.282e-08 1.055e-10 500.603 < 2e-16 ***
## btc_n_transactions -2.897e-05 6.909e-06 -4.193 2.84e-05 ***
## btc_miners_revenue 6.158e-05 8.148e-07 75.573 < 2e-16 ***
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
##
## Residual standard error: 26.87 on 2636 degrees of freedom
## (1 observation deleted due to missingness)
## Multiple R-squared: 0.9992, Adjusted R-squared: 0.9992
## F-statistic: 1.145e+06 on 3 and 2636 DF, p-value: < 2.2e-163.4 Results
We established the effect of total USD value of bitcoin supply in circulation on USD market price across major bitcoin exchanges.P-value of total USD value i.e. btc_market_cap, btc_n_transactions and btc_miners_revenue is less then 0.05, hence it is significant in determinig the market prices of Bitcoins. Also adjusted R-squared value is high therefore model fits the data.
library(ggplot2)##
## Attaching package: 'ggplot2'## The following objects are masked from 'package:psych':
##
## %+%, alphaggplot(bitcoin.df, aes(bitcoin.df$btc_market_cap, bitcoin.df$btc_market_price)) +
geom_point(color="red") +
ggtitle('BTC Market Capitalization vs. Market Price') +
theme(plot.title = element_text(size=19.5, face="bold",
margin = margin(10, 0, 10, 0)))+
labs(x="Market Cap (USD)", y="Market Price (USD)")+
theme(axis.text.x=element_text(angle=50, vjust=0.5)) +
theme(panel.background = element_rect(fill = 'grey75'))+
stat_smooth(method = "lm", formula = y ~ x, col = "blue")## Warning: Removed 1 rows containing non-finite values (stat_smooth).## Warning: Removed 1 rows containing missing values (geom_point).
ggplot(bitcoin.df, aes(bitcoin.df$btc_miners_revenue/1000000, bitcoin.df$btc_market_price)) +
geom_point(color="firebrick") +
ggtitle('BTC Miners Revenue vs. Market Price') +
theme(plot.title = element_text(size=19.5, face="bold",
margin = margin(10, 0, 10, 0)))+
labs(x="Miners Revenue MM (USD)", y="Market Price (USD)")+
theme(axis.text.x=element_text(angle=90, vjust=0.5)) +
theme(panel.background = element_rect(fill = 'grey75'))+
stat_smooth(method = "lm", formula = y ~ poly(x,2), col = "yellow")## Warning: Removed 1 rows containing non-finite values (stat_smooth).## Warning: Removed 1 rows containing missing values (geom_point).
ggplot(bitcoin.df, aes(bitcoin.df$btc_n_transactions, bitcoin.df$btc_market_price)) +
geom_point(color="firebrick") +
ggtitle('BTC Transactions vs. Market Price') +
theme(plot.title = element_text(size=19.5, face="bold",
margin = margin(10, 0, 10, 0)))+
labs(x="Transaction Volume MM (USD)", y="Market Price (USD)")+
theme(axis.text.x=element_text(angle=90, vjust=0.5)) +
theme(panel.background = element_rect(fill = 'grey75'))+
stat_smooth(method = "lm", formula = y ~ poly(x,2), col = "yellow")## Warning: Removed 1 rows containing non-finite values (stat_smooth).## Warning: Removed 1 rows containing missing values (geom_point).
bitcoin.df <- na.omit(bitcoin.df)
library(corrplot)## corrplot 0.84 loadedcor <- cor(bitcoin.df[,2:12])
corrplot(cor, method = "pie", main = "Correlation Matrix")
The variables closest related to Market Price are Market Cap, Trade Volume, Blocks Size, Transactions per block, Hash Rate, Difficulty rate to find a new block.
4. Conclusion
This project has been done to realise the trend behind the rise of “Bitcoin”. The initial price of bitcoin, set in 2010, was less than 1 cent. Now it’s crossed $16,000. Once seen as the province of nerds, libertarians and drug dealers, bitcoin today is drawing millions of dollars from hedge funds. The recent price surge may be a bubble. Or it could be a belated recognition by the broader financial community that so-called cryptocurrencies – digital forms of money – are going mainstream. It might be time to nail down what a bitcoin is, and why its price has been going through the roof.Bitcoin’s rapid growth model is a sign of shifting paradigms in the world of finance. Bitcoin’s upward trajectory in the markets continues, traders could expect to see even more record prices in coming weeks. Bitcoin’s growth in popularity is the lack of external regulation and control from big banks.Coinbase, a bitcoin exchange, was overwhelmed by two to three times its normal traffic on Nov. 29, when bitcoin’s price soared past 11,000 dollar, making its service temporarily unavailable to some users. New crypto-focused hedge funds are opening up weekly, and already surpass 100. Most of them invest at least part of their funds in bitcoin.
A recent survey shows, that trust inbanks and regulatory authorities, and governemtns is at an all time low. People are actually trusting businesspeople more than they’re trusting governments and leaders. in another survye, 45 percent of people in this very crucial demographic in the U.S. were saying that they’re comfortable using an independent or branded currency.Corporations are filling gaps that governments can’t afford to fill.
Cryptocurrencies are the first step of this evolution. Cryptocurrencies are digital money that isn’t run by any government or bank. It’s money designed to work in a world without intermediaries. Bitcoin is the most ubiquitous cryptocurrency, but there are hundreds of them. There’s Ethereum, Litecoin, Stellar, Dogecoin, and those are just a few of the more popular ones. And these things are real money.
Cryptocurrencies are the first step to a world with a global programmable money. And in a world with programmable money, I can pay anyone else securely without having to sign up or ask permission, or do a conversion or worry about my money getting stuck. And I can send money around the world. This is a really amazing thing. It’s the idea of permission-less innovation. The Internet caused an explosion of innovation, because it was built upon an open architecture. And just like the Internet changed the way we communicate, programmable money is going to change the way we pay, allocate and decide on value. Programmable money democratizes money.
“Evolution of the current financial system or a revolution to come in terms of the circulation of financial flows”