HOW BITGESELL GETS VALUE

HOW BGL GETS VALUE

The value of Bitgesell (BGL) is primarily determined by supply and demand, similar to Bitcoin. Unlike traditional currencies or fiat money, which are backed by central banks and government trust, Bitgesell does not rely on a traditional "backing," such as gold reserves or other assets. Instead, its value is supported by several key factors.

1. Supply and Demand on Exchanges

The magic happens on the exchanges. Currently, Bitgesell is available only on a few decentralized exchanges (DEX), where transactions of wrapped Bitgesell (WBGL) take place, specifically on BSC, ETH, ARB and OP networks. When the demand for Bitgesell increases relative to its supply, the price tends to rise. The amount of Bitgesell available for trading on DEXs (and in the future, on centralized exchanges) and the willingness of buyers and sellers to accept specific prices directly influence its current value.

2. Scarcity and the Halving Mechanism

Bitgesell was designed to be even scarcer than Bitcoin, with a maximum supply limit of 21 million units, of which over 1 130 756 BGL have already been burned. Every 52,500 blocks mined, Bitgesell undergoes a halving event, which reduces miners rewards by half, further restricting the supply of new BGL coins. This event exerts upward pressure on the price, as with fewer BGL entering the market, the supply does not increase proportionally to demand. The current block reward is 12.5 bitgesell coins.

3. Mining Costs and Network Security

The cost of electricity and equipment needed to mine a Bitgesell also influences its price, as this reflects the production cost of the coin. If Bitgesell’s price drops too far below this cost, fewer miners will operate, potentially affecting network security. While the mining cost sets a psychological floor for the price, it does not directly determine the value. Moreover, since Bitgesell mining requires high computational power (ASIC or FPGA) and substantial energy consumption, miners are incentivized to operate only if Bitgesell’s value justifies energy costs or if the mining occurs as a secondary free activity alongside more valuable cryptocurrencies, such as Bitcoin, Litecoin or Bitcoin Cash.

4. Market Factors and Investor Confidence

Various external factors, such as government regulations, new technological developments and even global economic conditions, impact Bitgesell's price. As an emerging asset and "reserve asset," Bitgesell volatility remains high, with price currently available for just a few cents. As acceptance and adoption of BGL increase, the market tends to view it as a store of value, which appreciates the asset over time.

Thus, the market value of Bitgesell results from a combination of its limited supply, investor confidence, mining costs and the dynamics of market supply and demand. While it lacks conventional "backing", its value is grounded in its technology, security and recognition as a legimate store of value.

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