Bitcoin and Price Volatility: Technology, Supply and Market Risks

Bitcoin's technical foundations

Bitcoin (BTC) records transactions through a distributed network. Nodes verify transactions and blocks under the protocol; proof of work forms part of its consensus mechanism. Its supply rules set a limit of about 21 million coins, but limited supply does not mean prices must rise.

Public records and wallet control

Bitcoin's on-chain records are publicly accessible. Addresses not directly labelled with names do not make it fully anonymous. Private keys authorise spending; leaked keys or recovery phrases may give others control of assets. Confirmed transfers generally cannot be reversed by the sender, so check the full address, asset and amount before sending.

Why do prices fluctuate?

Prices respond to demand, liquidity, leverage, macroeconomic conditions and news. Technical features, scarcity and narratives such as digital gold cannot individually guarantee preservation of value or returns. Bitcoin's official information before using Bitcoin also warns about volatility, wallet protection and irreversible transactions.

After learning the basics, distinguish buying from selling

Buying means paying HKD to receive BTC; selling means delivering BTC to receive HKD. VBIT handles Bitcoin trades at physical Hong Kong stores, with HKD settled in cash. For each direction, see the guide to buying BTC and BTC to HKD Service. Before transferring, also read the transaction safety checks.