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Please include your IP address in your email. How is the price of Bitcoin calculated? Many people wonder how the price of Bitcoin is calculated, but it’s important to remember that it works no different than it would with other currencies or objects. Let’s first look at how the prices of most things are derived – we can use oranges as an example.
What is the price of an orange? As a starting point, one would derive the price of an orange based on two things: how much someone is trying to sell it for, and how much another person is trying to buy it for. If John wants to sell it for USD2. 50 and Sarah is only prepared to pay USD2. But if they agree on a price that works for both, let’s say USD2.
25, then the transaction will happen. If it’s winter there might be more people wanting to buy oranges, so the price will go up. Bitcoin is the same as another. Oranges on the other hand can vary in size and quality. All this means is that it’s easier to come up with a price of a currency or Bitcoin. Once again, just what a buyer and seller will agree on. Many people might not realise that other currencies work exactly the same – if you are holding a coin or note of your own local currency in your hand, at any given point in time there are millions of people buying and selling your local currency, so while you might observe it as stable, it’s value actually continuously changes.
When you want to exchange it for another currency at a currency desk, let’s say for USD, one day you pay 10 local currency to a dollar, the next day maybe 11 or 9. Bitcoin works similarly to foreign currency. 5862498 44 42 35 51 44 60 45. How do I protect my private keys? How do I keep my Bitcoin safe?