Who Controls Bitcoin and How is it valued?
One of the questions that keep popping up in the minds of digital enthusiasts is who controls bitcoin. Many people think that bitcoin is uncontrolled and therefore not sustainable.
Bitcoin is popular digital money. Some argue that the value of bitcoin is significantly higher than the market value, while others argue that bitcoin is worthless. Any central bank or government does not officially sponsor cryptocurrencies. They have traded on an open market, comparable to the stock market.
The emergence of Bitcoin tried to fulfill a long-standing promise of decentralized money. Many corporations are putting their economic interest in the bitcoin ecosystem. There are whales, miners, exchanges, developers, and many economic and financial entities. Even the community attempts to rebalance and tip the scales in its favor.
Who controls Bitcoin?
Bitcoin is digital money, and as such, it is immune to the absolute control that a single person or group of people may attempt to impose. No one controls Bitcoin as such because what truly defines its control is totally digital code, software. This is true, at least in its operation, and it is difficult to modify.
From its genesis to the present, no single person or group of persons wrote or decided every piece of code that makes up Bitcoin. Instead, it was the work of a community, with hundreds, if not thousands, of people from all over the world contributing to its production. Despite this, and although its decentralized evolution, Bitcoin is not immune to attempts by individuals or small groups of persons to dominate it.
The best defense against total control in Bitcoin is a simple software license, free software. Who would have guessed? Satoshi Nakamoto foresaw this and created Bitcoin as free software as a result. That way, if someone attempted to dominate the system for their gain, the rest of the community could easily override that action by changing the code to go a different course. Who would have guessed?
Government Intervention and other factors
Bitcoin is a one-of-a-kind commodity still in its early stages. As a result, its future is uncertain. While the value of bitcoin may rise over $100,000, it may also fall below $0. The most significant single factor influencing Bitcoin’s price is likely to be government intervention. The key federal regulators to keep an eye on are the Federal Trade Commission, the Commodity Futures Trading Commission, and the Securities and Exchange Commission.
Investing in bitcoin is a high-risk, high-reward venture. Tesla CEO Elon Musk’s Tweets have influenced cryptocurrency market values. Early investors that amassed a sizable bitcoin position, dubbed “bitcoin whales,” could sway markets by engaging in a huge transaction. Most individuals should restrict their bitcoin investments to amounts they can afford to lose.
The Bitcoin whales are powerful parties in the Bitcoin world that get their influence from their wealth. The Huobi exchange, for example, has a known address 35hK24tcLEWcgNA4JxpvbkNkoAcDGqQPsP, which now contains a total of 141.451,59463747 BTC. What can a Bitcoin whale do with such a large sum of money? Well, it will have a significant impact on the price of Bitcoin and, by extension, the worldwide cryptocurrency markets.
Valuation vs. Value
The investor determines the value. If bitcoin meets your investment objectives and expected returns at a price you’re willing to pay, then it’s worth that price. When you check the bitcoin price, you’ll see this as the market price.
It’s crucial to understand that investment valuation is not the same as investment worth. Analysts examine a company’s financial performance and stock market prospects in the stock market. The outcomes are quantified and then rated using community-accepted criteria to evaluate the stock’s genuine worth. When comparing Bitcoin to other cryptocurrencies, you can calculate its relative value.
The Market Forces
Market forces determine the price of Bitcoin, just as they do for any other products or services. Prices will most likely rise if more individuals desire to purchase than sell. The price tends to reduce when there are more sellers. A service like CoinMarketCap or a public blockchain explorer can help you locate the most current bitcoin price.
Some exchanges may display different bitcoin prices. This is due to the fact that certain exchanges function independently of the open market and only serve their members. Even higher or lower than the market price. This can be advantageous since you may purchase bitcoin without incurring network costs.
The introduction of stores and exchanges to the Bitcoin ecosystem was a watershed. Many additional businesses are involved in the cryptocurrency space to make money and support the idea. Paypal, BBVA, JP Morgan, and a slew of other companies that put money towards destroying Bitcoin are now hoping to benefit from it.
The Bitcoin Community
The Bitcoin community is a group of people who are continually trying to safeguard the project they believe in, but they may also destroy it. A large group of critical thinkers keep up with what’s going on in the Bitcoin world and aren’t afraid to speak up when they don’t like something.
Is the community organized in a decentralized manner? Yes, but with immense power, which many people attempt to gain an edge. Although it may appear callous to say so, some people seek to create the chaos they need to accomplish their goals by creating turmoil in the community.
The equilibrium
Three major groups are vying for control of Bitcoin and how each can manage its influence in the ecosystem. Even though all of these factors exist, none has complete influence over Bitcoin. And this may be explained using Newton’s First Law, which states that the sum of all forces acting on a given object equals zero, resulting in equilibrium.
So, we can conclude that the forces and factors that can affect prices are not single and its valuation also depends on the factors mentioned above. If you know about the factors and influences, you can trade well in the crypto market, especially Bitcoin.
As you can conclude, technically, a single entity does not control bitcoin. However, similar to the stock market, market forces control bitcoin. It would be naive to assume that such a large ecosystem will be uncontrolled.