Crypto currency and its regulation — Overview
BITCOIN A BASIC UNDERSTANDING
Bitcoin is a decentralized digital currency (crypto) that lets people send value peer-to-peer over the internet without needing banks or a central authority. Launched in 2009 by an unknown person or group under the pseudonym Satoshi Nakamoto, it uses blockchain technology: a public, distributed ledger where all transactions are recorded.
New bitcoins are created through mining, which involves using computational power to solve cryptographic puzzles. That process also secures the network.Total supply is capped at 21 million BTC; this finite supply is built-into its protocol.
How It Works
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Wallets & Keys There are public key/address to receive BTC, and a private key which you use to sign/send BTC.
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Transactions When someone sends you BTC, the transaction goes out to the network. Miners include it in a block once it's verified, and it becomes part of the blockchain (the ledger).
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Mining & Proof of Work Miners compete to solve cryptographic work proofs to add new blocks. This requires energy, but helps ensure security / consensus.
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Halvings & Scarcity
Roughly every 210,000 blocks (about every 4 years), the reward miners get for adding new blocks halves. This slows the issuance of new BTC over time.
Current Status
Recent trends potray Softer inflation data, large ETF inflows, and a generally bullish sentiment have helped push the price up toward new resistance levels
Main Factors Influencing Bitcoin Price
1. Supply & Demand Dynamics
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Fixed Supply: Only 21 million BTC will ever exist. This scarcity creates value.
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Halving Events: Every ~4 years, the mining reward halves, reducing new BTC supply → historically leads to price increases.
2. Market Demand (Investor Behavior)
Retail adoption (individual buyers), Institutional adoption (companies, hedge funds, ETFs) and Use cases (payments, remittances, “digital gold” investment).
3. Macroeconomic Conditions
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Inflation & Interest Rates: High inflation often boosts Bitcoin as a hedge; rising interest rates can reduce demand.
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Global Crises: Financial instability, wars, or banking issues push investors toward Bitcoin as a “safe-haven asset.”
4. Regulation & Government Policy
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Positive regulation (e.g., approval of Bitcoin ETFs in the U.S.) → boosts price.
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Negative regulation (e.g., bans in China, restrictions in India) → drops price.
5. Technology & Network Factors
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Upgrades (e.g., Lightning Network for faster payments).
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Network security, transaction speed, and scalability improvements.
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Mining costs (electricity, hardware prices) → influence miner profitability and selling pressure.
6. Market Sentiment & Speculation
Media coverage and hype cycles, fear & Greed Index (psychological investor sentiment), Large holders (“whales”) moving coins can create sharp price swings.
7. Competition & Alternatives
Growth of Ethereum, Solana, or stablecoins may divert some investment. But Bitcoin often retains dominance as the “original” crypto.
At the end of the day, despite of its various advantages earning bitcoin the name of "digital gold", it continues to remain as a higly volatile instruments without a proper government trust. Nevertheless, it continues to be a life saver against infaltions and currency fluctualitions and protects the wealth of the investors
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