Little did we know that any activity we register on these communication channels, Twitter and Facebook, influences the price of this puzzling digital currency Bitcoin. According to a new blog post and study by Social Media Analytics company, Socialbakers, confirmed that as social media activity rises so does the price of the currency Bitcoin.
This peer-to-peer network payment network has slowly but surely presented alternative opportunities to traditional financial services provided by big financial institutions or firms but not widespread enough. Recently, the cryptocurrency has come under attack by People's Bank of China (PBOC) announcing the immediate crackdown and shutdown of it, according to a Business Insider report.
The announcement had a direct impact on the value dropping it from $1,076 to $576. In other words, a 46 percent decline in value but nonetheless this digital payment has been known to fluctuate in prices before.
The creator of Bitcoin was introduced by the pseudonymous developer-Satoshi Nakamoto-who brought into existence in January, 2009. This period of time corresponds to a harsh period in the United States dealing with the financial crisis that was unleashed there and that followed right after across the globe.
In two separate graphs provided by Socialbakers provides insight to the activity on Facebook and Twitter separately. The graph covers a period of one year comparing the value of Bitcoin with another graph counting the number of Facebook Fans and right below that the number of Twitter mentions.
The tone towards Bitcoin seems to have shifted positively in spite of recent headlines. Even in the Nov. 18 2013 hearing by the United States Senate Committee on Bitcoin resulted somewhat positive.
“The result of the hearing was that, aside the challenges represented by Silk Road's case and its early, speculative stage, Bitcoin offers “legitimate financial services”. The committee's general positivity has brought Bitcoin closer to mainstream acceptance, and has changed the tone of the conversation. The currency's value dramatically increased after the hearing, and as it turns out has had an observable—and measurable—impact on social media,” according to Socialbakers.
The usage of an alternative currency could be the result of the financial struggles, obstacles and rising fees of financial services taking place at the present time. With overwhelming public knowledge and evidence that the lack of regulation, skyrocketing profits from big financial institutions led to believe this is a new frontier and caused a frenzy about this subject.
Why does Bitcoin still remain unfamiliar for some? Perhaps because it is an alternative financial payment network that offers users a less expensive mean compared to official established payment networks; Bitcoin transactions are anonymous. According to Wikipedia, the Bitcoin is linked to criminal activities and black markets.
Economists have had mixed reviews towards Bitcoin. So who exactly explains more or less what is all the commotion about? According to award-winning Economist Paul Krugman from the New York Times published on his column the following observations on it earlier this year:
“What is Bitcoin? It’s sometimes described as a way to make transactions online — but that in itself would be nothing new in a world of online credit-card and PayPal transactions. In fact, the Commerce Department estimates that by 2010 about 16 percent of total sales in America already took the form of e-commerce.”
For the time being as year concludes the evolution of Bitcoin continues on. In addition, we now know social media activity has a positive influence on its value and to determine the negative activity of social networking will have to wait.