I am in need of somebody more informed than I to inform me of the relationship between bitcoin depreciation/inflation and markets, and the effects that both have on them. Who can help?
Cheers.
(?)DNMs and bitcoin inflation/depreciation
I am in need of somebody more informed than I to inform me of the relationship between bitcoin depreciation/inflation and markets, and the effects that both have on them. Who can help?
Cheers.
[3 Points] None:
[3 Points] None:
BTC value be dropping, and sometimes it be rising.
[1 Points] bullsonparade2487:
DNMs are the primary outlet for bitcoin based transactions, and are therefore a significant factor in the valuation of bitcoin. Tying into what /u/Major_Trippy posted, the prices for products on DNMs are set against real world currencies. Bitcoin, while used as a currency in these situations, is in reality a finite commodity. As the volume of DNM transactions increase, the value of bitcoin also increases because that same number of bitcoin now has to accommodate transactions totaling a higher real world value.
Think of going to a mall where you can't buy things with actual money, you have to buy things using tokens the mall created. The mall has an exchange where you can buy the tokens from, and then the stores you spend the tokens at can sell them back to the exchange for real money. However, the stores still set their prices to real currency. At any given time, the mall has a set number of tokens in circulation that has to represent all of the transactions that take place there; let's say 10,000. If the volume of sales the mall produces in one circulation is $10,000, then each token will represent $1. If the sales volume increases to, say, $100,000, then the value of the tokens would increase to $10 each, so that the same number of tokens can be used to represent the increased sales volume. If the sales volume decreased to $5000, then the tokens would be worth just 50 cents. This hypothetical scenario is a huge oversimplification of the bitcoin-DNM relationship, but the underlying principle is the same; each bitcoin represents a specific and unchanging percentage of market activity, so as the value of market activity increases the value of bitcoin increases as well.
[1 Points] _GordonBombay:
I remember sending 3 BTC to SR1 when it was something like $50/BTC and forgetting my username. A few months later the price of BTC skyrocketed into the $600s and I figured out my account info and went on a shopping spree. That's how fucking trustworthy SR1 was. I would never send coin to a market these days. Prices are low and you know some market or tumbling site is going to disappear or get "hacked" during the next random price jump.
Bitcoin prices are volatile as hell. I really don't understand how vendors can stay in business with the price swings.
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