How Blockchain Works: Marketplace & Price

[Music] hi my name is kinjal Shaw and I'm a partner at watching Capital my name is olianka odannarin I am the founder of black women blockchain Council and I'm also a blockchain Enthusiast we were founded back in 2013 so one of the earliest to focus specifically on blockchain use cases and we invest across the entire industry the mission of black women blockchain council is to make sure that no one gets left behind in particular the black women we want to make sure that this technology is a field that they see themselves at I think of blockchain as a horizontal technology that can be applied to many different sectors what really drew me into blockchain is how interdisciplinary it is it pulls on threads from economics politics social sciences and even beyond that to philosophy I myself am an investor at blockchain Capital I spend most of my time better understanding the technology researching and doing diligence on a number of opportunities and then working with Founders to help build this industry together [Music] every week you read that bitcoin's price is going up or down some newfangled cryptocurrency skyrockets in value and a piece of digital art famously sells for 69 million dollars but a few months later you read that everything is crashing and people are losing money and then it all goes back up again what's going on what does it even mean for things to have value on the blockchain blockchain as a technology allows us to make new forms of cryptocurrencies and new forms of ownership it does this by enabling decentralized record keeping but the technology itself doesn't assign prices or values people do that prices on a blockchain are determined by how much people are willing to pay using traditional forms of money how does this work well transactions are saved on a blockchain when somebody gives their currency to somebody else but what do they get in return well it could be anything really like buying a pizza using Bitcoin these days the most common transaction is to trade digital assets for each other or for traditional money on an exchange an exchange is a marketplace where anybody can buy or sell something the price at any given moment is not set by a central Authority but by what people are willing to pay but if lots of people want to buy these same assets we may see the price go up as an example consider the London Stock Exchange when this Marketplace emerge in a coffee house in the early 1700s people traded Stocks by shouting the price making a deal and then handing over cash cryptocurrencies and other tokens are bought and sold in the same way on Modern exchanges in both cases and in any free market there's no higher power deciding prices just a free-for-all based on the economic principle of supply and demand but why do the prices swing so much more for digital assets that depends on the asset and why people value it digital assets on a blockchain could have physical real world value today people are experimenting with selling concert tickets on the blockchain one day blockchain could be used to record government recognized ownership of a home with real walls and real roof the price of a home is determined by supply and demand in the real world independent of how its ownership is recorded the blockchain is just a digital setting in stone to record that ownership and doesn't impact the price other digital assets only have psychological value you value it because you believe somebody else will also value it like digital art where price is based on how much the buyer believes they'll get for reselling a given piece even traditional currencies don't have real world value unless others believe in them consider the US dollar the paper itself has no value dollars are only valuable if you believe you can use them for payment and that the person you pay believes the same thing with the traditional currency disbelief depends on a country's military or economic power if everybody believes a currency has value if they stop believing a currency stops having value this is why some traditional currencies can drop in value causing inflation many factors can lead to why people believe there is value in cryptocurrency things like media hype government regulations and businesses accepting digital currency can all cause people to believe or disbelieve the price of Bitcoin or any other cryptocurrency on a blockchain ultimately measures how much people believe blockchain technology is touted by many for its potential and yet many blockchain projects have failed because of hacks and scams beliefs can fluctuate wildly which is why prices go up and down so much and so quickly if a lot more people believe digital assets could One Day become much more valuable if a lot fewer people believe these assets could become completely worthless and with so many different types of projects using blockchain technology it's hard to tell which will succeed and which are doomed to fail foreign [Music]

Channel: Code.org

Views: 618

Keywords: Code.org, computer science, code, Hour of Code, Blockchain, crypto, cryptocurrency, bitcoin, how crypto works, how blockchain works, blockchain technology, crypto price fluctuation, crypto value, crypto price, why does crypto go up and down

Id: d9rKkk3oVdY

Length: 6min 20sec (380 seconds)

Published: Wed Jun 14 2023