What may be the difference between central bank authorized currency and Bitcoin The bearer of central bank authorized currency can merely tender it for exchange of goods and services The holder of Bitcoins cannot tender it because it is a virtual currency not authorized by a central bank However, Bitcoin holders may be able to transfer Bitcoins to another account of a Bitcoin member in trade of goods and services and also central bank authorized currencies
 
 Inflation will bring down the real value of bank currency Short-term fluctuation in demand and offer of bank currency in money markets effects change in borrowing cost However, the face value remains the same In the event of Bitcoin, its face value and real value both changes We have recently witnessed the split of Bitcoin That is something like split of share in the stock market Companies sometimes split a stock into two or five or ten dependant on the market value This can increase the volume of transactions Therefore, while the intrinsic value of a currency decreases over a period, the intrinsic value of Bitcoin increases as demand for the coins increases Consequently, hoarding of Bitcoins automatically enables a person to make a profit Besides, the original holders of Bitcoins could have a huge advantage over other Bitcoin holders who entered the marketplace later For the reason that sense, Bitcoin behaves like an asset whose value increases and decreases as is evidenced by its price volatility
 
 When the original producers like the miners sell Bitcoin to the general public, money supply is reduced available in the market However, this money is not going to the central banks Instead, it goes to a few individuals who can become a central bank Actually, companies are allowed to raise capital from the marketplace However, they are regulated transactions This means as the total value of Bitcoins increases, the Bitcoin system will have the strength to interfere with central banks' monetary policy
 
 Bitcoin is highly speculative
 
 How do you buy a Bitcoin Naturally, somebody has to sell it, sell it for a value, a value decided by Bitcoin market and probably by the sellers themselves If you can find more buyers than sellers, then your price goes up It means Bitcoin acts like a virtual commodity It is possible to hoard and sell them later for a profit Imagine if the price of Bitcoin comes down Of course, you'll lose your money similar to the way you lose money in stock market Addititionally there is another way of acquiring Bitcoin through mining Bitcoin mining is the process where transactions are verified and put into the public ledger, known as the black chain, as well as the means through which new Bitcoins are released
 
 How liquid is the Bitcoin  https//paperwalletbitcoincom/  It depends upon the quantity of transactions In currency markets, the liquidity of a stock is dependent upon factors such as for example value of the company, free float, demand and supply, etc In the event of Bitcoin, it appears free float and demand are the factors that determine its price The high volatility of Bitcoin price is because of less free float and much more demand The worthiness of the virtual company depends upon their members' experiences with Bitcoin transactions We would get some good useful feedback from its members
 
 What could possibly be one big problem with this particular system of transaction No members can sell Bitcoin should they don't have one This means you will need to first acquire it by tendering something valuable you possess or through Bitcoin mining A big chunk of the valuable things ultimately would go to a person who is the original seller of Bitcoin Of course, some amount as profit will certainly go to other members that are not the initial producer of Bitcoins Some members will also lose their valuables As demand for Bitcoin increases, the original seller can produce more Bitcoins as is being done by central banks Because the price of Bitcoin increases in their market, the initial producers can slowly release their bitcoins into the system and create a huge profit