The word “Bitcoin” can be confused with other cryptocurrencies like Litecoin and Feathercoin. In actuality, Bitcoin is the only true cryptocurrency in the world and only consists of one hundred and thirty-five and thirty-four billion bits of information encoded in a special kind of computer code called a “public-key cryptology.”
This is a set of sound theoretical concepts that are put into practice by the developers of Bitcoin. The actual name for the currency is “a system for the conversion of one type of currency into another type of currency,” or “an automated transaction system for the transfer of money between two parties.”
Unlike other currencies, Bitcoin has been designed to be both a secure and an efficient money transfer system. Its many features include the ability to use a peer-to-peer payment system, and the ability to conduct real-time financial transactions with no fees whatsoever.
The conservation of the value of Bitcoin is an important element because its transfer will create a direct and even total cost on one party, which is equal to the amount of Bitcoins purchased by the recipient, or rather spent by the receiver. For example, if you sold 100 Bitcoins for $200.00, your costs will be two-hundred-and-fifty-dollar.
Thus, the conservation of value is an important element in this entire process. However, what do we mean by conservation of value? Well, take any of the currencies I listed, and look at how long it takes the value to decrease, before it begins to increase again.
Now, note that this is not a direct correlation, but rather, the inverse of the costs. The longer the values decrease, the more expensive it becomes to make a transaction. This is the natural effect of supply and demand.
Therefore, one key feature of Bitcoin is the conservation of value. This makes Bitcoin an ideal technology to use for transactions where there is a lot of money involved.
There is a natural price to any commodity, which is known as the “Prices of Production.” Since there is a limited amount of bitcoins created every ten minutes, the price to purchase a currency will also be limited, but only if the buyer is willing to wait.