Bitcoin certainly has had a wild ride throughout this year as the cryptocurrency flirted with all-time highs before plummeting as much as 6% on December 21st. This decline represented the deepest drop in the crypto asset in nearly a month.
However, this doesn’t come as a surprise as the crypto space is a fairly volatile playground. Even though its price has skyrocketed throughout the years, it has also crashed a handful of times, some crashes more dramatic than the others (looking at you, 2017!).
Trading bitcoin lucratively is no child’s play. A great deal of risk and uncertainty is involved. Therefore, it is essential that any potential traders perform their due diligence in order to have the ability to make well-informed decisions. In spirit of this great year full of bitcoin surges coming to an end and a promising next year, here are some core ideas for the uninitiated:
What Is Bitcoin?
Bitcoin is essentially a form of digital currency that holds a prominent position in an ecosystem of cryptocurrencies.
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Unlike modern fiat money, Bitcoin is decentralized which means that rather than following the traditional process of a bank or credit card company having control over the transaction, Bitcoin instead relies on a set of private and public keys that help ensure protection for people on both sides of the transaction.
The Bitcoin transaction system is purely peer-to-peer and relies on blockchain technology for smooth operation and security.
Blockchain is a distributed ledger technology (DLT) which allows data to be stored globally on thousands of servers at a time all the while, allowing anyone on that network to see everyone else’s entries in near real-time.
Who can use Bitcoin?
Anyone, anywhere in the world that has an internet connection can receive or send Bitcoin which is recorded in a public ledger.
You don’t have a Bitcoin account which is linked to your name or identity like in the case of banks. Instead, you hold a key that allows you to send desired units of value to any address on the network, without necessarily knowing who the other party is.
How Is Bitcoin Created?
Bitcoin is created through a process referred to as “mining”. Miners make use of powerful computers to compete with each other in order to win Bitcoin by solving complex math puzzles that get more difficult as more people try to win. As there are only a limited number of bitcoins in existence, the amount of Bitcoin that miners can win decreases over time.
This means that like gold, Bitcoin is a deflationary currency. As Bitcoin becomes more scarce and hence more valuable, more people will be motivated to hoard it, further increasing its value and so on.
What Are Trading Websites And How Do They Work?
Trading sites are the platforms used by traders to trade Bitcoins and make money off of them. They use advanced AI algorithms to predict prices of Bitcoin.
This means that you don’t even need to be an active trader to make the most out of the rapidly evolving dynamics of this crypto market. Trading platforms such as https://www.bitcoincircuit.biz/ makes use of Artificial Intelligence (AI) and Machine Learning (ML) algorithms that aid in maintaining profitability by adjusting to the developing market conditions. These prove highly beneficial, especially for Bitcoin novices.
