Bitcoin market has both, holders that are long-term investors, and opportunists that are short-term investors. So, low-volatility periods are when holders will purchase their assets. Opportunists, on the other hand, will end such periods and influence volatility when they step into the market.</p>\n<p>Therefore, each type of investor obtains a few methods they can utilize, depending on the actions of the other investor. 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Terms","updated":false,"chapter":"https://assets.bitdegree.org/crypto/assets/crypto-book/chapters/crypto-101-glossary.jpg","chapter_simple":"https://assets.bitdegree.org/crypto/assets/crypto-book/chapters-simple/crypto-glossary-101.jpg","rating":100,"sections":["A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"]}],"nextSection":{"id":428,"original_id":null,"author_id":40,"translator_id":null,"title":"What is Gas Price?","slug":"what-is-gas-price","section":"G","keyword":"Gas Price","status":"published","definition":"is the price a user can pay for a transaction.","content":"<p>Gas price is widely utilized on the <a href=https://www.bitdegree.org/"/crypto/buy-ethereum-eth/">Ethereum platform, but the term transaction fee is used in every cryptocurrency and blockchain. To specify, one gwei is equal to 0.00000001 ETH. And the gas price on the Ethereum blockchain refers to the quantity of ETH in gwei that has to be paid to <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-miner/">miners for validating transactions on the network.</p>\n<p>The majority of other cryptocurrencies and blockchains use analogous systems for controlling and sorting which transactions on the network are handled first. By establishing a fair market mechanism and motivating additional businesses to offer processing power to the network, this method assures genuine competition and safety for the blockchain.</p>\n<p>The gas price is decided by an auction-type system in which miners search for the highest fees linked to a transaction, then run these transactions from there in a deteriorating order.</p>\n<p>Besides, blockchain privacy and steadiness increase along with the extra <strong>computational power</strong> that is measured in <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-hash/">hashes. This is&nbsp;because the potential fraudsters would require to overtake this power to disrupt the security of the blockchain.</p>\n<p>Extreme gas fees have been a big difficulty for Ethereum users and hinder the network's capacity to scale.</p>\n<p>As more and more of the most popular <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-decentralized-exchange-dex/">decentralized exchanges (DEX)</strong></a> like <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/uniswap/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Uniswap</strong></a> and <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/sushiswap/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>SushiSwap</strong></a>, as well as <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-defi/">DeFi projects, and <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-are-decentralized-applications-dapps/">DApps run on Ethereum, the more cramped the network becomes.</p>\n<p>This influences the higher gas prices to increase even more. For instance, in the 2020 DeFi boom, Uniswap partakers paid approximately $50 in gas fees per transaction.</p>\n<p>So, the issues with Ethereum&rsquo;s gas fees should be solved when the new Ethereum 2.0 that uses the <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">proof-of-stake algorithm finally launches and swaps computational power to validate transactions for staking.</p>\n<p>Furthermore, because costs change over time and are naturally higher during high activity periods, the majority of Ethereum wallets provide general standards for gas pricing along with computation comparisons with other gweis.</p>","level":"medium","meta_title":"What is Gas Price? Definition & Meaning | Crypto Wiki","meta_description":"Gas Price meaning: Gas Price - is the price a user can pay for a transaction.","meta_keywords":null,"language":"en","created_at":"2022-03-18T07:54:01.000000Z","updated_at":"2022-05-13T14:32:23.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-gas-price"},"prevSection":{"id":421,"original_id":null,"author_id":40,"translator_id":null,"title":"What are Gains?","slug":"what-are-gains","section":"G","keyword":"Gains","status":"published","definition":"are the increased value or profit.","content":"<p>Gains can also be called <strong>profits</strong> and they refer to an increase in value or profit. Gains arise from buying a physical or digital asset and then selling it for a higher price. As an example, a trader can purchase <strong><a href=https://www.bitdegree.org/"/crypto/buy-ethereum-eth/">Ethereum at <strong>$15K</strong> and then sell it at <strong>$20K,</strong> gaining <strong>$5K.</strong></p>\n<p>Gains happen in several formats, hence, there are <strong>gross and net profits.</strong></p>\n<p>Gross profits are calculated before deducting expenditures and other costs paid between the acquisition and sale of an item. <strong>Net yields</strong>, on the other hand, are the ultimate amount after fees are deducted. Gains are taxed in the majority of zones.</p>\n<p>Nonetheless, the tax owed is mostly determined by the exchanged asset. Just the United States and a few other countries have taxed gains. Cryptocurrency earnings in other locations stay untaxed as a result of the global legislative uncertainty.</p>\n<p>Another example would be when the investor obtained a<strong> $1 transaction fee</strong>, in this scenario, the initial gain is less than the transaction costs.</p>\n<p>Some additional aspects like physical property, agent&rsquo;s fees, maintenance costs, and so on, are included in the profits made. On financial books, gains take over the column of the credit.</p>\n<p>Also, gains can have either <strong>realized or unrealized profits</strong>. Speaking of unrealized profits, these happen when an asset&rsquo;s price increases, but the investor refuses to sell it during this phase.&nbsp;</p>\n<p>For instance, usually, unrealized profits in the cryptocurrency area, are caused by a very unstable market nature, where prices can jump between two price radicals through a very short time.</p>","level":"easy","meta_title":"What are Gains? Definition & Meaning | Crypto Wiki","meta_description":"Gains meaning: Gains - are the increased value or profit.","meta_keywords":null,"language":"en","created_at":"2022-03-18T07:21:07.000000Z","updated_at":"2022-05-13T14:32:23.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-are-gains"},"currentChapter":"G","currentSection":"what-is-game-theory","chapterTitle":"G","readingLevel":"medium"},"url":"/crypto/learn/crypto-terms/what-is-game-theory","version":"cdd198d50cbe5c9c21c9329d7c096ffc"}" class="container-fluid d-flex crypto-book p-0">
Crypto Terms: Letter G

What is Game Theory?

Game Theory MEANING:
Game Theory - is an applied mathematics method used to research human activities based on the specific decisions people make in response to certain acts.
Medium
2 minutes

Let's find out Game Theory meaning, definition in crypto, what is Game Theory, and all other detailed facts.

The game theory was created by John von Neumann and is one of the most utilized theories in the economical area.

To put things into perspective, the game theory can be seen from the digital assets marketplace perspective. The employment of game theory within the cryptocurrency context leads to the creation of cryptoeconomis. It is essentially the study of the economics of blockchain protocols and the possible results that the design of these protocols might showcase.

For example, the Bitcoin market has both, holders that are long-term investors, and opportunists that are short-term investors. So, low-volatility periods are when holders will purchase their assets. Opportunists, on the other hand, will end such periods and influence volatility when they step into the market.

Therefore, each type of investor obtains a few methods they can utilize, depending on the actions of the other investor. They are all acting in their own best interests, fighting for asymmetric benefits while working together to increase the total value of BTC.

This is an excellent implementation of game theory since it examines how different groups of people react and respond to the actions of the other group.

The Prisoner’s Dilemma

One of the most well-known game theory examples in practice is the prisoner's dilemma. It depicts a situation in which two criminals are being questioned after being captured. Each suspect is questioned in a separate room and is unable to interact with the other.

The prosecutor attempts to get the convicts to testify against each other in order to minimize their charges. If one criminal testifies against the other, he may be released while the other is detained for an extended amount of time.

Both are arrested for a shorter amount of time if they both testify against each other. And if they both decide not to betray each other and remain silent, they are merely condemned to the bare minimum of time in jail owing to a lack of proof.

The prisoner's dilemma has numerous variations, and it exemplifies the concept of utilizing game theory models to examine human behavior and potential consequences.