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New bitcoin is produced by the process of mining, where specialized computing hardware attempts to solve a math problem by trial and error. The answer can be verified with one calculation, but there’s no way of working out whether a value is an answer other than trying it. The reward for providing a correct answer is new bitcoin. The Bitcoin network has an algorithm governing block production; the target is one block every ten minutes. Every 2016 blocks, the difficulty of the math problem changes. The algorithm looks at how long the previous 2016 blocks took to mine.

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Everyone will have heard of it, know the costs and benefits, and will have made a decision about whether to use it or not. Right now bitcoin is in price discovery mode, and when the price is discovered, that will be the end of the volatility. The price of the digital asset has grown 51% in the last month alone as the so-called ‘halving’ event approaches whereby Bitcoin production will fall from 900 to 450 a day on 19 April. Get the latest Bitcoin news, Bitcoin price predictions and analysis of BTC, the world’s first and best known cryptocurrency.

Bitcoin hits another new high as UK regulator paves way for more crypto trading

With BTC’s rising price comes a renewed interest in the recently flagging U.S.-based spot bitcoin ETFs. BlackRock’s iShares Bitcoin Trust (IBIT), for instance, reported large inflows on Wednesday, with investors adding nearly $185 million of fresh money to the fund, according to Farside Investors. This followed an inflow of $98.9 million the previous day and comes after weeks of flows that were flat to negative alongside bitcoin’s poor price action. The largest cryptocurrency by market cap traded just shy of $65,400 at press time, up 2.7% over the past 24 hours. The broader CoinDesk 20 Index was higher by 1.6% over the same time frame, with Caradno (ADA), Avalanche (AVAX) and NEAR Protocol (NEAR) all outperforming bitcoin’s advance, but ether (ETH) modestly underperforming.

Monetary stimulus in the U.S. and China appeared to be the catalyst for the crypto’s run higher.

From January to March of this year, the price nearly doubled, from $39,000 https://digiconomist.net/bitcoin-energy-consumption to $73,000. Within 24-hour periods, bitcoin still occasionally rises or drops 10%. Regulatory and economic trends, as well as the approaching halving event to cut Bitcoin production, have led the cryptocurrency’s value to soar.

The news also moved prices for precious metals, with gold rising to a record high above $2,700 per ounce and silver hitting its strongest level in 12 years.
Every 2016 blocks, the difficulty of the math problem changes.
It may well be that these other features of bitcoin more than compensate for its volatility.
Even people who know very little about bitcoin know that its price fluctuates wildly.
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Bitcoin Hits $65K for First Time Since Early August, Renewing Investor Interest in Spot ETFs

Governments can respond to this by creating more money, and thus keeping the price of the money in terms of other currencies as well as goods and services. One argument is that bitcoin is too volatile to be money. That is, bitcoin can never become a common medium of exchange because it’s too volatile. First, while volatility is in the negative column with respect to money, bitcoin racks up many things in the positive column – divisibility, fungibility, transportability, privacy, durability, and more. It may well be that these other features of bitcoin more than compensate for its volatility. Second, most currencies slowly lose value over time.

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But 70% price drops and 500% price increases are interesting, and keep people talking about bitcoin. And each time, some people who didn’t use bitcoin before are enticed into acquiring some. Even people who know very little about bitcoin know that its price fluctuates wildly. From April to June 2011, the price jumped 3000% from $0.80 to $26.35. https://www.investopedia.com/terms/c/cryptocurrency.asp By October, it was back down to $2.50, a 90% drop. While these are some of the highest short-term fluctuations, bitcoin remains volatile.

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It may be that many people prefer volatility – to the upside and downside – to an inexorable decline in value. So, it’s not purely being new https://www.bankrate.com/investing/best-investments/ that makes an asset volatile. One obvious reason for gold’s volatility is that demand fluctuates. For normal goods, when demand goes up, supply goes up too. From 2010, Apple went from producing 40 million iPhones each year to producing over 200 million in 2024.

If they’d kept the supply at 40 million per year, the price would have gone up, as the 200 million people who wanted iPhones would have competed to purchase the scarce supply. The supply of new gold almost certainly cannot increase by 500% in a decade, because it resides in the ground and the process for getting it out won’t allow for such increases in discovery or extraction. So, when demand for gold increases, so does the price. They keep the attention on bitcoin, even as it ages without changing very much at all. It’s just a protocol working as it should for a decade and a half.