Several factors can influence Bitcoin use around the globe. Here are the top factors influencing this cryptocurrency use.
Hal Finney, a computer programmer, received the first reward for mining Bitcoin on 12th January 2009. One year later, Bitcoin remained a novelty product, with only computer geeks and enthusiasts interacting with it. However, Laszlo Hanyecz, a programmer, bought two Pizzas with 10,000 BTC. If Laszlo kept his BTC, he would sell them at around $613 million today.
These transactions marked the initial uses of what would become the world’s largest cryptocurrency. Today, some experts argue that Bitcoin and its underlying technology will eventually transform how people transact like the internet changed the way people communicate. But before Bitcoin achieves this, it must overcome some factors that influence its use. Here are some of those factors.
Most people access Bitcoin via crypto exchanges like https://bitcode-ai.live/. These digital platforms allow individuals to purchase Bitcoin using fiat money. Also, you can sell your Bitcoins to receive fiat money on these platforms. Currently, the world has many crypto exchanges, and their number keeps growing.
If a digital coin is available on many crypto exchanges, the number of people who purchase and use it increases. However, swapping this virtual currency between two or several crypto exchanges involves a fee, which raises the investment cost.
Consequently, some people don’t use or trade Bitcoin due to the cost that crypto exchanges charge. And this influences Bitcoin use since some people don’t want to accept it because they will pay a fee when converting it into local fiat currency.
Bitcoin’s production cost also influences its adoption and use. Miners require specialized servers and computers to generate new coins. Ideally, Bitcoin miners verify or validate crypto transactions by solving complex math puzzles. The Bitcoin network rewards miners with new tokens that enter the global circulation.
The activity of the miners enables this decentralized digital currency to work as per its protocol. However, mining Bitcoin is now a costly undertaking due to the high electricity requirements and expensive capital for setting a rig. And as the cost of mining increases, Bitcoin’s value increases.
Ideally, no miner will spend resources on Bitcoin mining if the reward is not sufficiently big to cater to the expenses and give them a profit. Nevertheless, some individuals and institutions combine efforts to set up Bitcoin mining rigs, making their capital investment relatively low.
Some governments don’t appreciate Bitcoin due to its unregulated and decentralized nature. Therefore, they look for ways to regulate or control this virtual currency. For instance, the Chinese government outlawed bitcoin mining and trading.
Other governments tax the fiat money that people use to cash out Bitcoins. Other countries are developing more ways to control this virtual currency and its market. A country with many Bitcoin users will affect its use negatively by setting new rules against it. Also, some nations are creating their government-issued cryptocurrencies to compete with Bitcoin.
Most people fear that they may buy Bitcoins, and then the government bans their use. Thus, they may lose the money they invest in this virtual currency. Other countries don’t have rules regulating Bitcoin. Therefore, uncertainty around Bitcoin’s regulation hinders some people from using it.
Social Media Hype
Social media hype influences Bitcoin use and value. And this can work in two ways increasing the price or lowering it. For instance, more people start researching and using Bitcoin when influential people like Elon Musk talk about it positively on social media.
Bitcoin is new and volatile, with values fluctuating wildly. Some people don’t know much about this virtual currency yet, limiting its usage. Also, some governments have banned Bitcoin, creating uncertainties among users. But as more people learn about Bitcoin, its use will undoubtedly increase.