Bitcoin is a virtual currency that was dubbed as the cash for the Internet and it has become one of the most valuable cryptocurrency of our time that exists purely in a digital form. From 2020 to 2021 the value of Bitcoin increased by over 200%, and it surpassed $60,000.
As Bitcoin gained more attention and the demand for BTC increased, a lot of new retail investors were looking to earn BTC. Being familiar with the significant aspects of cryptocurrency is a great step towards online trading and can help you learn more about the Bitcoin ecosystem.
Decentralized Aspect of Bitcoin
Bitcoin was purposely designed to be a decentralized cryptocurrency and the blockchain network which is essentially the payment system where these transactions are validated and processed is completely independent of central authorities. In fact its designed is peer- to-peer-based and each computer system that works on the network can validate transactions while having a complete overview of everything that is happening in the network.
In other words, this means that the Bitcoin has a value that is completely formed under the impact of the market supply and demand and it isn’t affected by events like political instability or financial crisis for example. This is one of the factors that made Bitcoin an appealing investment choice for anyone including retail and institutional investors.
Another aspect that you need to be aware of is the supply of BTC which is first and foremost restricted to 21 million Bitcoin tokens by the creator Satoshi Nakamoto in order to regulate the inflation rate of Bitcoin.
Moreover, the current supply of BTC is based on the mining process which issues new BTC into circulation. During this process blocks of transactions are being verified in order to keep the network secure and also this is based on the consensus algorithm which solves the double-spending problem with Bitcoin.
Trading sites are crypto marketplaces where BTC is being sold, bought, or exchanged for other cryptocurrencies and traditional currencies. Beyond this online trading sites are also important because they are marketplaces where the supply and demand meet and a consensus regarding the Bitcoin price is being formed.
One example is Bitqh software which is based on AI-powered algorithms and offers automated trading and has a high profitability rate. Actually, you can make a profit of up to $750 with a minimal deposit of $250.
Bitcoin wallets are one of the most important parts of the Bitcoin ecosystem because without an appropriate wallet you are not able to participate in trading, or sending and receiving BTC. There are multiple types of Bitcoin wallets, basically, you need to choose between a hot and cold wallet. The hot wallets are connected to the Internet and are accessible online they also might exist only digitally.
On the other hand, cold wallets are physical wallets that are specifically created to offer the highest level of security for BTC and are not that compatible with online trading or shopping with your BTC. Also, there a lot of hot wallets like mobile wallets, online and desktop wallets. They are more convenient and you can use them on any device particularly the online and mobile wallet
Bitcoin bull runs are associated with Bitcoin halving and they are expected to happen after one because the halving event cuts in half the number of Bitcoin tokens being produced and also halves the block reward that the miners receive for working on the network.
That being said, it is an important event because over the years the supply has decreased compared to the demand. Especially as more companies are supporting Bitcoin and publicly are explaining the benefits of Bitcoin payments a lot of new investors are getting on board and the demand is definitely growing at a faster pace than the supply.
One example is the investment that Elon Musk did it recently and that pushed the price over $60,000 of Bitcoin. He made an investment of $1.5 billion from Tesla and due to the small scope of the crypto market, this event had a huge impact on the value of BTC and its market cap.