Bitcoin is highly volatile, and its value has risen and fallen in equal proportion since its inception. Due to its volatility, it has prompted many stories that explain why Bitcoin is a bubble. This is not true because the Bitcoin development is more than any other bubble witnessed in past years. It offers important suggestions about the future of theglobal economy. Monumental volatility and appreciation of bitcoin is mainly as a result of speculation. People are going forbitcoin investment simply because they think that bitcoin will rise in value and not because it can be used to purchase goods and services.
While gains have been realized in recent markets, this has not been as a result of high speculation alone. The gains reflect that the whole Bitcoin system is better designed compared to other online currencies. Even more significantly, the gains also reflect the anxiety about thesafety of global banking systems and stability of major currencies. Although people want to invest in bitcoin, one thing that should be noted is that the Bitcoin system has technicalities which are very complex. But to ensure that the digital currency is successful, there were two major challenges which its designers had to overcome.
The first challenge was to control the supply of bitcoins and the second challenge was to prevent counterfeiting. This means that with bitcoin investing, there will always be a transaction history attached to the currency unit. However, an investor will be allowed to keep all transactions anonymous. It is hard to counterfeit Bitcoins because all bitcoins must have an authenticated history. The supply of bitcoin is controlled in order to reduce a number of new currencies that are added into the system. This is similar to paper currencies which are strictly controlled by governments in order to prevent serious inflation. Computer hobbyists monitor Bitcoin system to ensure it runs smoothly and prevent counterfeiting. click here to get more information free bitcoin.