More than a decade after its creation, Bitcoin continues to dominate the global financial industry as it breaks barriers with each passing day. 2020 and 2021 (so far) have proven to be the best years in its existence as this cryptocurrency reached a record-breaking value of over $50,000. Thanks to this surge in price, Bitcoin is now as valuable as gold.
Due to the fact that Bitcoin is often the headlining news in the finance sector, a majority of the world’s population is familiar with this currency. People know that it is mostly used to make a profit and that it holds several advantages over FIAT currencies when it comes to online payments.
Instant transactions and greater security are some of those advantages. Since all of these facts are well-known, we decided to take a look behind the scenes and try to shed light on the technology that powers this cryptocurrency. Let’s check it out.
Since we just mentioned greater security as an advantage, let’s start with cryptology as the first type of technology that powers Bitcoin. Cryptology (or cryptography) is a method used to mask all types of communication through the use of codes. In doing so, the information that is passed is well-hidden and out of harm’s way. This same technology is what provides Bitcoin users with a certain level of anonymity. Keep in mind that this does not mean that you are fully off the grid.
Many of you know that trading sites are considered marketplaces where traders buy/sell Bitcoins. But, they have more to them that you know. Trading sites also have advanced AI systems that help sellers determine when is the best time to sell their Bitcoins. How?
Let’s take Bitcoin Digital, one of the most reputable trading sites, as an example. Once you register and enter the Bitcoin Digital login details, you gain access to their AI system which can help you make money. This software takes all the data on Bitcoin from the market and analyzes it. After the process is complete, the AI makes a very accurate prediction on what will Bitcoin’s future price be.
As you know, Bitcoin is known for its volatility, which is why this type of information can help you maximize your profits. Thanks to the precision of the data, the daily profitability rate at Bitcoin Digital is high, which is why thousands of people from all around the world use their services.
Blockchain is a term that is closely connected with Bitcoin. This is a distributor ledger technology that contains data on Bitcoin transactions on thousands of servers and it lets all of the users see everyone else’s entries in real-time. To simplify it even more – each verified Bitcoin transaction is also known as a block. The register that stores all the transactions (blocks) is called a blockchain. If the block is a page of a notebook, blockchain represents the notebook.
Bitcoin halving is an event that takes place every 4 years, or when 210,000 Bitcoins are mined. During this period, the circulation of Bitcoins is cut in half and it becomes very difficult to mine them. This process controls the amount of this cryptocurrency that is distributed on the market. More so, halving events are usually predecessors to spikes in value.
Speaking of mining, we ought to explain them, as well. This is a process in which a miner solves various complex puzzles to verify transactions and complete a block. For each transaction that miners complete, they receive Bitcoin as a reward. Mining is the best way to earn Bitcoins as it is free. The second way to earn Bitcoins is to buy them, but that comes with a much greater risk.