Bitcoin’s value in US dollars at any given time is the result of supply and demand (see the real time CoinDesk ticker widget above). The greater the demand there is from bitcoin buyers the higher the BTX/US exchange rate will go meaning more US dollars will be needed to buy one bitcoin. The greater the demand from bitcoin sellers the lower the BTX/US exchange rate will go meaning less US dollars will be needed to buy one bitcoin.
There is no question that bitcoin’s $US pegged value is volatile. It has gone from being worth a few cents at its inception in 2009 to a high of $1,200 in 2013 to a current BTX/US exchange rate of approximately $400. As the exchange rate increases, the value of the bitcoin held in a Mentor’s wallet will increase as well. This is called “currency appreciation” and it can produce dramatic gains just like shares of stock that go up in price. Of course the inverse is true if the BTX/US exchange rate decreases.
Traditional fiat currencies are subject to inflation when more of the currency is printed and issued. However, bitcoin is “deflationary”. The maximum number of bitcoin that will ever be released is 21 million, and that will be over 100 years. Because there is a finite number of bitcoins it can be expected to increase in value over time. Increases in value will produce a second source of income for Mentors along with their commission payments. The 20.43873608 bitcoin earned by the Mentor in the “BCU Commission Program” example would be worth $24,526 if the BTX/US exchange rate should go to its 2013 high of $1,200. That puts a very interesting spin on things.
Nassim Taleb (author and statistician), “Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative.”