The Technology That Powers Bitcoin
2021 has been nothing short but amazing for Bitcoin. This cryptocurrency reached pedestals and heights that none of us thought are possible. As of mid-March, the value of 1 Bitcoin exceeds $50,000 and Bitcoin is now as valuable as gold. The global financial industry has a new leader and it makes all regular payment methods look extremely obsolete.
The reason why Bitcoin is so superior is that it holds numerous advantages – user anonymity, instant online transactions, greater security, and of course – it offers users the chance to make money and possibly become overnight millionaires.
Many of us are familiar with the fact that Bitcoin is a cryptocurrency that is used to make money and all that, but not a lot of us know what’s going on behind the scenes, which is why we wanted to take some time and take a look at the technology that powers Bitcoin.
Blockchain is the cornerstone of cryptocurrencies, Bitcoin included. This is one of the most commonly used terms, so allow us to explain it. Since Bitcoin is a decentralized currency and it is not controlled by one centre, it had to find an alternative when it comes to storing information. Blockchain is that database – it stores all information about the Bitcoin transactions. These Bitcoin transactions are called blocks, and as the term suggests – the blockchain connects (chains) all of them together.
Think of it this way – if a block represents one page out of a notebook, blockchain would be the notebook.
Trading sites are viewed as marketplaces where traders sell their assets, but the truth is that they are far more than that. They have an additional service that actually helps traders maximize their profits. How? Let’s take bitcoin prime, a leading trading platform as an example.
This platform has an advanced AI system that collects all the data about Bitcoin from the market. After the data is collected, it is then analyzed. The goal of this process is to determine how Bitcoin will fluctuate in the near future, which by the way, Bitcoin prime software does with extreme precision. The results are given to the traders and thus, traders know when will be the best time to sell their Bitcoins and generate the highest possible revenue.
Speaking of blocks and transactions, it is worth explaining what mining means. This is a process that involves solving various puzzles. These complex puzzles are actually Bitcoin transactions – the more you finish, the more complete the blockchain will be. The reward that miners receive for each transaction is Bitcoins.
Mining is the most popular way to earn Bitcoins. It may be hard, but it is free.
Earlier in this article, we mentioned that one of the biggest advantages that Bitcoin had is that it provides its users with a certain level of online anonymity. This feature is provided by a method called cryptology. This method uses codes for communication and it is able to mask the real information that is being transferred between the servers.
In doing so, the real identity of the users is hidden and out of harm’s way. Thanks to the cryptology method, Bitcoin is one of the safest currencies, if not the safest, on the planet.
Finally, halving events take place approximately every 3-4 years. In this period,it becomes extremely hard for people to mine Bitcoins as their circulation is massively cut. That is why the price of Bitcoin after halving events usually goes up.
So far, there have been a total of 3 halving events and all of them led to surges in prices. The first one was in 2013, the second was in late-2016, and the third one was in 2020.