The BTC/USD pair is the most popular cryptocurrency/fiat pair, and as such, it is definitely a “major” for those involved in the crypto industry. For the mainstream financial industry though, it is more of an exotic pair, which is slowly but surely gaining in importance. Some people view bitcoin as more of a digital commodity, better suited for the role of value-storage than that of currency. Others still see the money of the future in it. Whatever the case, one thing is certain: together with other cryptos, bitcoin has seen a massive, and apparently sustainable value-growth lately.
Although it has been conceived as virtual money, bitcoin is unlike the fiat currencies of nowadays, in every way. First off: it is decentralized. No one owns bitcoin and no entity can exert complete control over it. Those with the most control over the course the virtual currency takes as it navigates its challenges, are the miners: the people responsible for keeping the bitcoin network running. All bitcoin transactions are peer-to-peer, meaning that there aren’t any intermediaries involved in them.
Every bitcoin transaction is registered in a public distributed ledger, called blockchain. The blockchain is maintained and updated by miners, who use specialized hardware to complete these tasks. For their efforts, they are rewarded with bitcoins. Only 21 million bitcoins can ever exist, and more than 16 million have already been mined. Of these, a few million were lost, during the early years of the currency, when one BTC was only worth a few cents and people were careless with their virtual money.
Recently, with the massive uptick in bitcoin’s value, using its mBTC (milibitcoin = 1/1,000 BTC) subdivision has become practical. Satoshi is the currently accepted smallest subdivision of BTC. One satoshi is worth 1/100,000,000 bitcoins.
The USD is the dominant currency of the world economy. It is the most popular reserve currency, it is the most traded currency (apparently, 88% of the trading volumes generated by the Forex market involves the USD one way or another), and it is the currency used to determine the value of certain commodities, such as gold and oil.
As a matter of fact, the USD is the primary fiat currency against which the value of most cryptocurrencies is measured.
The USD is controlled by the Federal Reserve, which tweaks its value by manipulating the interest rates. An interesting fact about the USD is that there’s more of it held outside the US, than within the country. The USD is after all, the national currency of several other countries too.
The long-term outlook for the BTC/USD pair is a clearly bullish one, according to most experts. The very nature of the two currencies points to such a conclusion too. While the USD is obviously an inflationary currency, the BTC is a deflationary one. While the upside for BTC is certainly there, no one really knows how far up the BTC/USD can/will go. Some see it peak at $100,000, while others think that $1 million is fair game too, eventually.
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