Here’s a quick Bitcoin to rand price calculator and graph. This price is set on Bitcoin exchanges supply and demand forex malaysia chat over the world by consumers buying and selling it.
Since each Bitcoin exchange operates independently, the market force of buyers and sellers will set the price independently on that exchange. A simple example Imagine we live in a world with only one type of apple and that they for this demo, all of the same quality. In this world, we have a farmer, Sally, who takes her ripe apples to a marketplace to exchange them for money. Now, if there is only one farmer and there is a big demand for apples, she can keep charging a higher price and higher price. Hey, I’d like to buy an apple! If Sally charges less than what the buyer is willing to pay, she’ll make an instant sale.
The other thing you’re likely to witness is competition. Since we’re living in a place where lots of people like apples, there are now hundreds of apple farmers, all eager to make some money. These new farmers will come to market with their apples and set up shop next to Sally. They will soon see that by pricing their apples a little cheaper, they can get more trades. Through healthy competition and the forces of supply and demand, the price of apples from all the different farmers should soon stabilise. Bitcoin markets Getting the price of Bitcoin in South African rand, works exactly the same way. Since Bitcoin markets are open to thousands of buyers and sellers, this means that there is healthy competition and a fair market-derived exchange rate.
This is the equivalent of when you have two or more apple markets in the same city: maybe the price of apples will be slightly lower at the one and a little higher at the other. Over time, people will only buy the cheaper apples and the prices should adjust again. If we have a market is in the south of the country and they actually only farmed apples in the north, there should theoretically be cheaper apples available in the north. And farmers like making money more than they like apples.
Our enterprising farmers will make a plan to buy as many cheap apples in the north and sell them down in the south. This will go on until the apples sold by other farmers in the south become cheaper, in line with their prices or more and more farmers also go and buy those cheap northern apples. If enough farmers go from the south to the north to buy the cheap apples, the merchants in the north will soon start increasing their price, until some sort of equilibrium has been found. This process of buying on one market and selling on another is called arbitrage. But, why then does it trade at R1090 per Bitcoin?
The answer is actually that it’s not more expensive, it’s simply the point where the market agrees on the price. Bitcoin on other exchanges, and sell it for a quick profit. Before you get too excited, remember that the farmers who traveled north had other costs involved in bringing the cheap apples to the south. They had to hire trucks, pay for petrol, pay for tolls and storage to get the apples to the south. South African exchange, the following would happen. The trader would take R1000 to their bank to buy dollar. 1 USD, with a conversion fee of 2.
The trader will give R1000, the teller will subtract the 2. 100 USD, he ends up with 0. Bitcoin exchanges need to make a living, so let’s say they charged the trader 0. 920375 the trader sends his Bitcoin from the overseas exchange to the South African one. International bank transfers take a few days, but let’s assume the prices stayed the same. 920375 BTC at a rate of R1095 and ends up with R1007. So, for all the risk and effort, the trader would have made a measly R7.