The Principle And Economic Analysis Of Bitcoin

The development of Internet technology has promoted the progress of all aspects of society.Under the background of Internet finance,the traditional financial model is changing,such as currency payment.With the deepening of Internet technology,the virtualization of money is deepening,and the market entry,trading and payment meth ods are also subverting the tradition.Bitcoin as a new means of payment began to ap pear in the public eye.It is a challenge to the traditional way of trading supported b y Internet technology.Despite the constant controversy since its inception,Bitcoin still occupies a place with its unique advantages-Asymmetric encryption,decentralization,transparency of transaction records and so on.In the eyes of opponents,Bitcoin is a wolf in sheep's clothing,a deception to investors,or a Ponzi scheme.However,in th e eyes of supporters,it is a reliable means of payment,not subject to government sup ervision,nor will it produce a virtual transaction record.From the regulator's point of view,it is more like a black hole,a place where money laundering and crime are il legal.It is undeniable that in just a few years,Bitcoin has developed to a certain scale,has a certain industrial chain structure and market,and even has become a financial tool for some investors.However,judging from the records of bitcoin transactions,wh ether the huge price fluctuations will be a bubble,so far,bitcoin prices have experien ced four sharp rise and fall,many countries even began to prohibit the operation of it s trading platform.With the development of Bitcoin,more and more voices begin to gather here.As a highly innovative and controversial "invention" in the 21 st century,t his paper will discuss the supply and demand equilibrium of Bitcoin price and its infl uencing factors on the basis of monetary economics,and discuss the correlation betwe en the price of Bitcoin against US dollar and macroeconomic data by using VAT mo del.The transaction and speculation properties of Bitcoin are described.From the perspective of economics,finance and Internet technology,this paper wi ll analyze the influencing factors of Bitcoin price,describe the historical transaction re cords,discuss its price formation mechanism from the theoretical model of supply and demand in economics,and focus on the analysis of the impact of government regulat ion and Internet search on Bitcoin price.