March 29, 2023

Surprising Bitcoin price? This is just the beginning!

Bitcoin is a completely new technology, although the underlying concept has been around for decades. Solved double spending problem: You can use a digital certificate as money and be sure that no one else will spend it while you have it. An unprecedented paradigm shift has taken place, and its consequences are not yet fully understood and the tools that still make it possible to get the most out of a new idea do not exist.

Business development based on this new technologyrequires a fundamentally new way of thinking. Just like the first email service providers, they misunderstood what they were offering for a long time. It takes a new, correct look at Bitcoin so that it can fully reveal its potential and become omnipresent - and such a look will certainly appear.

The initial interface of the Hotmail email client. : Medium

Hotmail Service Applied Familiar Technologies(browser) to improve email access and delivery. E-mail clients such as Outlook Express have been replaced by web interfaces and mail in the "cloud", which gives many advantages compared to a separate software client that stores letters on a local drive.

Bitcoin, which is destined to completely changeThe money transfer industry should be understood separately, and not just like money on the Internet. Talking about Bitcoin as money is just as absurd as talking about email as just a new way to send letters: one does not replace the other, but fundamentally changes the way people send and read messages. These fundamental innovations are not just a replacement or one-dimensional improvement on existing ideas or services.

Bitcoin is not money. Bitcoin is a protocol. If we consider it in this perspective, using the correct assumptions, we can imagine it in the right context, which will allow us to make rational assumptions about possible profitable services based on it.

Every part of Bitcoin is a text. It is always text, and never ceases to be text. It is a fact. And as a text, it is protected in accordance with the provisions on freedom of speech of the constitutions of civilized countries. : Medium

If Bitcoin is not money, but a protocol, then tradingon exchanges that mimic the usual foreign exchange, stock and commodity markets, there should not be the only way to determine its price. The cost of email services is not determined on exchanges, and the same rule should apply to Bitcoin.

Continuing the course of thought when you typewrite a letter in your Gmail account and click “send”, it goes through your provider, through the Internet and the recipient’s provider, and then is displayed on the recipient’s device screen - from a smart watch to a laptop, smartphone or desktop PC.

So it is with Bitcoin: you enter the amount of money and send bitcoins to the recipient, bypassing the intermediaries. After your funds are delivered to another destination in the world, they must be “read”, that is, converted back into money, just like an email is displayed on the recipient’s screen.

In the case of email when shipmenttook place and the letter gave you its information, it no longer performs any function other than archival (accounting). Bitcoin keeps such records on the blockchain, and a good service based on it will store advanced transaction details for you locally. However, the recipient must have some product or provide a service.

This will be so until Bitcoin becomes preferable to fiat money because of its greater usefulness. Such an event can be called a "transformation."

The True Nature of Bitcoin - Instant Payments(even though it’s not money) anywhere in the world. This is not an object of investment, and keeping bitcoins in the hope that they will become more valuable is like holding emails or PDF files, hoping that in the future they will become more valuable: it makes no sense. Of course, you can hold Bitcoins and their value will increase, but you need to be patient in order to survive the harsh waves of sales and purchases in the process of transition to an economy that is completely based on Bitcoin.

Remember also that businesses that need to be keptBitcoins should worry about their value if their model is open and depends on the market. For Bitcoin-based closed-loop models, prices on exchanges do not matter, since they have everything under control. Such a business can move unlimited amounts of fiat currency with just a few bitcoins.

Despite the uniqueness of each coin andthe impossibility of double spending, bitcoins do not have their own value, unlike a book or any other physical object. Their value cannot grow; they remain unchanged, like the laws of mathematics, no matter who thinks about them. Misconceptions about Bitcoin are related to the fact that it behaves like money because of the impossibility of double spending. Behind erroneous ideas about Bitcoin hides its duality: the digital nature and the impossibility of double spending.

Being digital, bitcoin has it of information that make it not uncommon. But it occupies a special place between the goods of the physical world and the infinitely plentiful digital world of information: it is characterized by the characteristics of both worlds, although it belongs exclusively to the digital one. That is why it is often misunderstood, and that is why a new approach to creating a business based on it is needed.

Jelly Bean Razzles. At first it’s sweets, but if you start chewing, they turn into chewing gum. So is it really: candy or chewing gum? : Medium

All this partly explains why the price of BTC on exchanges does not matter to the consumer. If the price of one bitcoin will drop to 1 cent, this does not affect the money transfer amount. If you immediately exchange bitcoins for goods or currency, the transfer amount will be the same, no matter how much you pay for bitcoins at the beginning of the process.

Imagine what you want to forward to someonelarge text file. You can either send it as is or archive it in ZIP format. The size of the “compressed” file can be 87% smaller than the original. If you transfer this idea to Bitcoin, then the compression ratio is the price of bitcoin on the exchange.

If Bitcoin Costs $ 100 And You Want To Buy Somethingfrom a seller from India for $ 100, then you need to buy 1 bitcoin to send this amount. If bitcoin costs 1 cent, then in order to send $ 100 to India, you need 10,000 bitcoins. This can be expressed as a compression ratio of 1: 1 and 10,000: 1, respectively.

The same $ 100 are being sent to Indiayou are 10,000 or 1 bitcoin. The price of bitcoin does not affect the forwarded value, just like the ZIP files “don't care” what is inside them. Bitcoin and ZIP are just protocols that do their job. If the cost of bitcoin is not zero, its usefulness is the same as if the price was "very high".

Given all this, it is obvious that newservices for quick, unhindered conversion to Bitcoin, so that it can function as it should be in its nature, before the “transformation” occurs, when Bitcoin itself becomes money, because everyone will give it preference over fiat currency.

Current exchange business models do not matchdue to the nature of bitcoin. They project the models of stock, commodity and currency exchanges of the twentieth century on Bitcoin. It is difficult and inconvenient for an ordinary user to interact with these exchanges. In some cases, you have to wait up to seven days to withdraw bitcoins from the exchange account to fiat. Although it is not the fault of the exchanges, it really hinders Bitcoin to reach its full potential.

Imagine you were sent an emailfrom the other end of the world and you see a notification about this in the browser. Then you apply to the provider and wait seven days before the letter is delivered to your physical mailbox.

The very thought of this seems absurd, but this is what happens to Bitcoin without any technical justification.

Obviously, you need to rethink the services,emerging around Bitcoin, as well as its true nature. Rethinking services is a normal part of entrepreneurship, and the failure of old business models and the disruption of early participants in the process of continuous improvement and development should be expected.

Based on the foregoing, focus on priceBitcoin on exchanges using an inappropriate model for this new technology is irrational. It's like putting a canary breathing methane in a shaft full of oxygen-breathing people and hoping that it can sense the dangerous gases. The bird will die, even if everything is in order with the air, and the miners will run from imaginary danger to the exit, throwing the gold found.

Intraday traders speculating onBitcoins from home provoke price fluctuations. This is an artificial signal that has nothing to do with the demand for Bitcoin and its circulation as an economic tool. :

Bitcoin and the ideas behind it will not disappear. As the number of people downloading, installing and using wallets is growing, it, like Hotmail, will sooner or later reach a critical mass and will spread much faster across the Internet. When this happens, the right business models will spontaneously arise, which will seem to be something as self-evident as Hotmail, Gmail, Facebook, mobile phones and instant messages are now.

In the future, few will speculate onBitcoin value. Although it will be possible and even profitable, you can earn more by providing convenient services that use all the advantages of Bitcoin.

One thing is clear: in any future Bitcoin-related business model, speed comes first. Success awaits startups that allow you to instantly conduct a transaction at both ends. Bitcoin's price will inevitably stabilize, but since it has no value in itself, the most important characteristic of any Bitcoin-based business will be instant exchange for currencies or goods.

Businesses face many challenges related to efficiency, security and new thinking. Their solution will lead to new practices and programs that we still cannot even think about.

Finally, when the chaotic transition zone betweenfiat and Bitcoin will disappear and fiat will no longer be, everything will be evaluated in bitcoins and there will be no more volatility, since no one will use anything else for purchases and sales. If you are familiar with chemistry, then this can be compared to the achievement of reagents equilibrium. You can shake and mix the reagents as much as you like, but the reaction is completed and its final products remain.

Now the price of Bitcoin can grow very quickly andto fall in a wide range, because, in comparison with the amount of fiat currency in the world, its volumes are small. It can take off to what seems to many an inconceivable price, and then collapse again. This is precisely what we are now observing when they report "strong" fluctuations on a small number of exchanges specializing in the "manifestation" of prices.

As the mass of Bitcoin increases (its prices infiate) these fluctuations will be less and less. However, Bitcoin itself does not change from this; it is only his users who publish numbers as a signal to which they then respond. There is still a long way to go, but measuring progress is not based on the price of exchanges, but on the number of Bitcoin users.