Part 8 of Bitcoin History: 1500 BTCs cost less than $ 1


How much is a bitcoin worth? In terms of fiduciary money, the answer is constantly changing, but from the beginning, the following thing has come true: a bitcoin is worth as much as the buyer is willing to pay. Today it should be a few thousand dollars, but back then it was the other way around: for a dollar, you could buy several thousand bitcoins.

Read also: History of Bitcoin Part 7: The first major hacking

Bitcoin exchange rate calculation

<img class = "alignright wp-image-43368″ title=”Part 8 of Bitcoin History: 1500 BTCs cost less than $ 1″ src=”×193.jpg” alt=”Part 8 Bitcoin History: When the cost of 1500 BTC is less than 1 $ "width =" 266 "height =" 171 "srcset =" / 2017/04 / shutterstock_628641707-300×193. jpg 300w,×494.jpg 768w, shutterstock_628641707-600×386.jpg 600w,×448.jpg 696w, 2017/04 / shutterstock_628641707-653×420.jpg 653w, 1000w "sizes =" (maximum width: 266 pixels, 266 pixels)”/>Once an asset has a universally agreed exchange rate, it is simple to track its prices up and down. But when no one really knows what the market is willing to pay for an emerging asset, it may be difficult to reach a consensus on valuation – especially in the absence of trade facilitating price discovery. This is the dilemma that early Bitcoin users faced in early 2010.

"We are in a kind of" hen and egg "situation at the moment", it is noted Member of the Bitcointalk forum The Madhatter. "For an exchanger to sell bitcoins … to someone, he needs customers who have money and want coins … I mean, why would a heat exchanger stay there and accept bitcoins generated on your computers? They will simply spend their money and retreat. A few months earlier, the first rudimentary exchange rate for BTC had been calculated by the influential user of the "NewLibertyStandard" forum (aka NLS). Their pricing system was based on the amount of energy required to operate BTC – or "BC" as it was still often referred to at the time.

A simple model to roll the ball

"New Liberty Standard is doing a fantastic and logical job to help" kick start the movement, " rented On February 5, 2010, the user of the forum "BitcoinFX" added: "I am in the process of compiling a neural network model that takes into account other factors such as the finite number of Bitcoins, the bindings daily gold and silver, other currency pairs and daily trading. rate and the average number of Bitcoin users, etc. I am of course taking into account the New Liberty Standard. This model will be very adaptable to help calculate and predict future exchange rates and I will share it with our growing community. "

Today, the pricing models used to predict future prices for bitcoin have become infinitely more sophisticated, but even in 2010, it was apparent that some adopters thought beyond simple costs of extraction and were trying to Consider a world in which Bitcoin would break with its indexed price. and reaches a value determined by an array of external forces.
<img class = "medium-size wp-image-274187″ title=”Part 8 of Bitcoin History: 1500 BTCs cost less than $ 1″ src=”×181.png” alt=”Part 8 Bitcoin History: When the cost of 1500 BTC is less than 1 $ "width =" 300 "height =" 181 "srcset =" / 2019/01 / screenshot-2019- 01-12-at-12-58-34-300×181.png 300w, 01-12-at-12-58 -34.png 490w "sizes =" (maximum width: 300px) 100vw, 300px”/>Bitcoin Awards, as quoted on the New Liberty Standard website in 2009Although the NLS methodology has long been retired, an archived database Web page reveals the prices of the BTC that their system has experienced in 2009, explaining:

Our exchange rate is calculated by dividing 1.00 USD by the average amount of electricity needed to operate a high-CPU computer for one year, or 1331.5 kWh, multiplied by the average residential cost of United States electricity for the previous year, or $ 0.1166, divided by 12 months divided by the number of bitcoins generated by my computer over the past 30 days.

On December 28, 2009, according to the NLS, 1 US dollar would have brought you 1,578.77 BTC. Not bad.

Bitcoin History is a multi-part series of depicting the key moments in the evolution of the world's first and best cryptocurrency. Read the seventh part right here.

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