With different types of “members and interactions,” the Bitcoin ecosystem forms a complex network to create the secure Blockchain network everyone knows. There are several aspects of this ecosystem that make its functioning possible. Here is how it works.
Miners
Miners can be considered the pioneers of the Bitcoin ecosystem. The whole network can exist and function because of the miners. They are the reason why bitcoin even exists in the first place.
Just like real-life miners, bitcoin miners mine Bitcoins from the virtual world. The bitcoin spend their efforts on creating Bitcoins to release them for commercial use. Or any use for that matter.
Traders
They can be considered the connecting link between virtual and real currencies. Virtual currency is bitcoin, and real currency is the money used and recognized by governments worldwide.
Traders operate from trading platforms known as exchanges. The exchange acts as a platform to buy and sell their assets to other traders. Traders regularly interact with each other to exchange their coins.
They hope to profit from the rise and fall of bitcoin value. They buy bitcoin when the value is near or on the lower limit. When the bitcoin price reaches the peak value, they sell it. The profit from this exchange becomes their income.
There are other ways as well that traders use to make a profit. But one thing is for sure. To become an expert in trading, you need to know the ins and outs of the system itself. You can use Official system to make trades on a reliable platform.
Merchants
Bitcoin is not only used as a form of exchange between real currency and virtual currency. Most importantly, Bitcoin is used in commercial uses as well. Commercial purposes mean you can use it to buy goods and services.
Although this is only possible if the supplier supports and accepts bitcoin as a valid payment method.
The providers who accept bitcoin and deal in it are known as merchants. They run the marketplace where bitcoin is traded for other items and not just money. You can buy a plane ticket with bitcoin if the travel agency accepts bitcoin. You can buy virtual assets if the seller accepts bitcoin.
Merchants can be heavily influential in determining the value of bitcoin. When large organizations advertise that they are accepting bitcoin, it can cause an influx of bitcoin users. People would jump into the new trend and buy
Bitcoins even if they were not convinced of the idea of virtual currency before.
As a result, this will cause the price value of the cryptocurrency to rise drastically within a short time because there are more people buying Bitcoins than the number available.
The opposite can be true when a large amount of bitcoin needs to be converted into real money. Usually, a big merchant is expected to hold many Bitcoins from trading products. When they need to convert it into real currency, it will affect the market. Several Bitcoins will be entering the market simultaneously, resulting in a surplus of bitcoin supply, decreasing the price of the cryptocurrency.
Consumers
These days, the merchants have the option to buy their goods and services with the use of bitcoin. So there are the consumers, ones who use Bitcoins to trade with the merchants. The Bitcoins used by the consumers can be either bought through exchanges or mined directly. Consumers then buy goods of their own choice. They deal with the merchants directly. Considering all the aforesaid factors, using bitcoins is a chosen method to consumers.
Hoarders
Unlike the traders, they are not inclined to deal with bitcoin trading regularly. Instead of engaging in the acts of buying and selling bitcoin frequently, they choose to buy bitcoin and keep it like that.
Based on the mentioned above factors, it has been a firm belief to the crypto traders that the price value of bitcoin will rise dramatically in the future, out of which they wish to profits by selling their traded assets.
