The bitcoin/US Dollar pair is not a “conventional” currency pair, in the sense that it’s comprised of a virtual currency (BTC) and a fiat one (the USD). As such, there’s no official agreement on whether or not the pair is a major. Given how bitcoin is definitely the biggest virtual currency by market cap, as well as the best-known and most used, and that the USD is the world’s top fiat currency, the pair could certainly be considered a major. Is this a commodity pair though? If we consider the fact that some experts regard BTC as a digital commodity, rather than a currency, it might indeed be that.
Invented and introduced by an entity (a single person or a group of programmers) known as Satoshi Nakamoto, bitcoin is not simply the virtual version of a traditional currency. It is much more than that. It is also a payment system, as well as a decentralized currency, meaning that no one owns bitcoin and no single entity of any type can claim control over it, in any shape or form.
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Introduced in 2009 as open-source software, bitcoin is unlike any form of traditional currency, in just about every sense. bitcoin transactions are registered in a public distributed ledger called blockchain, and all transactions happen on a peer-to-peer basis, without an intermediary.
New bitcoins are “minted” by the very system that oversees the integrity of the blockchain and updates it with new transactions: a community of miners, who operate dedicated machinery crunching numbers around the clock, handling the above mentioned chores and solving intricate mathematical problems (which serve no practical purpose, other than making it difficult for miners to collect their BTCs).
The bitcoin system uses bitcoin as its unit of account. Subunits are milibitcoins (mBTC), which represent 1/1,000 bitcoins, and satoshis, which denote 1/100,000,000 BTC. With the recent price-increase of bitcoin, its mBTC subunit has already gained practical value.
Some view bitcoin as a store of value or commodity, rather than a currency.
The USD is the world’s most traded fiat currency, as well as the most popular reserve currency. Controlled by the Federal Reserve, the USD permeates every pore of the global economy. Important commodities such as gold and oil are traded almost exclusively in USD. Even cryptocurrencies like BTC have their values expressed mainly in USD. It is safe to say that the USD represents the “fiat system anchor” for cryptocurrencies.
The USD is the national currency of the United States of America, but due to its dominant global position, more USDs are actually used outside the country than within. Some 30 countries have adopted the USD as their national currency.
The value of the BTC/USD pair is mostly determined by the well-established mechanics of supply and demand. Given that there’s a limited number of bitcoins that will ever come into existence (some of which have already been lost), it is safe to assume that despite temporary setbacks, the BTC/USD pair is destined to push upward. By its nature, BTC is a deflationary currency.
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