Well... if you mined your own bitcoin at first you'd have w/e the going rate is.
Anyway it's a crypto-currency that cannot be centralized by any government. Only 21 million bitcoins will ever exist, and to produce one you need a computer to work out an algorithm that at the same time builds up the encryption and verifies the security of other transactions, making it basically unhackable (it would take 1,000 years to hack a bitcoin transaction right now). As the number of bitcoins in circulation grows, the algorithm becomes more complex, making the encryption more complex, and the rate of bitcoins entering the market to continually slow down. At this point you'd need something like 200 servers running for a week to generate a single coin, but when they first came out you could generate a few an hr with just a laptop.
Like any currency, it's value is based on the trust people put in it (which is why the encryption part is so important)... as more places start accepting it as a legit
currency that trust will just build more and it's market price should reduce in volatility. Once all 21 million coins are in circulation, theoretically their worth should rise with a really smooth and low inflation rate, making them even more useful for global transactions since you shouldn't have to deal with volatile exchange rates.
Since I make my money off currency trading and kind of need exchange rates to fluctuate, I'm not stoked on that last part lol.
think of it kind of like this: assume we were still on the gold standard, their is only so much gold on Earth, the gold that easiest to mine will obviously be mined first, as the gold becomes scarcer and harder to mine, the rate of gold entering the economy should slow down and become more expensive to mine until we've mined all gold we can. This just has the added bonuses of the fact that nobody can rob you, and the gold is weightless and instantly transferable.
Will it? Source? I've never read anything about it increasing... it just seems like the coins themselves get chopped into smaller and smaller pieces.... you know... digitally.
Anyway it's a crypto-currency that cannot be centralized by any government. Only 21 million bitcoins will ever exist, and to produce one you need a computer to work out an algorithm that at the same time builds up the encryption and verifies the security of other transactions, making it basically unhackable (it would take 1,000 years to hack a bitcoin transaction right now). As the number of bitcoins in circulation grows, the algorithm becomes more complex, making the encryption more complex, and the rate of bitcoins entering the market to continually slow down. At this point you'd need something like 200 servers running for a week to generate a single coin, but when they first came out you could generate a few an hr with just a laptop.
Like any currency, it's value is based on the trust people put in it (which is why the encryption part is so important)... as more places start accepting it as a legit
Since I make my money off currency trading and kind of need exchange rates to fluctuate, I'm not stoked on that last part lol.