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The technology that powers Bitcoin

By LLM Reporters  |  April 28, 2021
bitcoin

When it comes to the world of financial investment, cryptocurrency has been making waves for some years now, with Bitcoin in particular garnering global attention when it made numerous millennials overnight millionaires back in 2009. This young breed of investors, who were quick to see the potential value in this new digital currency, made huge profits after investing early on – and with the value of a single Bitcoin today standing at upwards of $60,000, it’s an investment that keeps on giving.

It’s little wonder then, that cryptocurrencies have become some of the most sought-after assets on the block, with both novice and seasoned investors now each eager to get themselves a slice of the pie. It has been reported that the number of newly-registered traders looking to purchase Bitcoin is increasing by the thousands with each passing day, and with many experts believing that its value has the potential to climb to as high as $100,000 by the end of the year, it’s a great time to make a move.

There’s no denying that Bitcoin trading is big business in 2021 – but how exactly does this intriguing digital currency work, and what is it about it that makes it so special? Here, we take a look at the technology that powers it, which although complex, all adds to the appeal of investing in crypto.

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Traders and experts alike had been talking up the prospects of Bitcoin long before the Covid-19 crisis paralysed economies the world over

Blockchain and mining

The main technology that allowed Bitcoin to grow without depending on banks to process transactions is known as ‘blockchain’. In layman’s terms, blockchain is the log that stores all the data about every transaction made with this cryptocurrency. 

One element of this is mining, which is the process through which new Bitcoins are entered into circulation, and also enables users to record and verify crypto transactions. In fact, it’s a critical component of the maintenance and development of the blockchain ledger, and is conducted with the help of sophisticated computer systems. Expensive, tricky and only sometimes rewarding, mining isn’t for everyone – but for investors interested in cryptocurrency, the appeal of being rewarded in Bitcoin is too good to ignore.

Each verified transaction becomes a block and is thus integrated into the blockchain, and analysts suggest that 100 percent of Bitcoins will be mined by 2140. 

bitcoin
When it comes to the world of financial investment, cryptocurrency has been making waves for some years now, with Bitcoin in particular garnering global attention when it made numerous millennials overnight millionaires back in 2009

AI in trading sites

There are various trading sites that serve as the marketplaces for trading Bitcoin. After registering at these platforms, traders can buy and sell Bitcoins with ease – all they have to do is choose a preferred payment method and deposit the funds into their accounts.

Some reputable trading sites such as bitqh.app provide traders with an extra service that involves the use of artificial intelligence (AI) systems, which collect and analyse market data about Bitcoin to make accurate predictions about potential future fluctuations.

These AI systems share the results of the analysis with traders, giving them valuable insight as to when the best times are to sell their Bitcoins, and thus maximise their profits. Thanks to these services, trading and profiting with Bitcoin has never been easier and more accessible.

Halving events

Halving events are the complete opposite of mining. While the task of miners is to record transactions and thus generate new Bitcoins in the network, the purpose of halving events is to make mining harder and control the flow of Bitcoins that are released onto the network.

These events take place every four years. Since Bitcoin was created in 2008, we’ve witnessed a total of three halving events to date, which took place in 2012, 2016, and 2020. The next three halving events are scheduled to take place in 2024, 2028, and 2032, and although it’s expected that by 2032, 99 percent of  Bitcoins will be mined,  it will take another 100 years for the network to be completely mined.

During halving events, mining becomes extremely difficult, making earning Bitcoins a much greater challenge for investors and driving value up as a result. In fact, each halving event has led to a spike in value of this cryptocurrency; the last one, which took place in May 2020, led to the surge in which Bitcoin topped $60,000 recently.

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Understanding Bitcoin mining and trading is not easy, but the rewards for those who take the time to learn the ropes have the potential to be huge

Cryptology

Cryptology is the technology that ensures that every Bitcoin user can securely make transactions – whether they’re looking to use it as a payment method or as a way to earn a profit. Also known as cryptography, the technology utilises unique codes as a means of communication between servers and in doing so, provides all Bitcoin users with a certain level of online anonymity. This greatly increases overall security as a result, and makes Bitcoin the most secure digital method/currency in the world today. It is also worth mentioning that Bitcoin has never been hacked in its history, which speaks volumes when it comes to its robustness.

The bottom line

Understanding Bitcoin mining and trading is not easy, but the rewards for those who take the time to learn the ropes have the potential to be huge. If you’re looking to make a new investment in 2021, then you could do a lot worse than looking into crypto – and with a thorough understanding of the technology it is underpinned by, you could soon be on the road to success.