Bitcoin
Bitcoin, Explained. Did you know around 17% of the US adult… | by Blockchain.com | @blockchain | Oct, 2022
Published
2 years agoon
By
adminDid you know around 17% of the US adult population now owns bitcoin? There’s no denying that crypto has gone mainstream.
From mining to the mystery around who invented bitcoin, there’s still confusion around this new and powerful technology despite increased adoption.
This article covers everything you need to know about bitcoin basics, the risks you should be aware of, and how to get started.
What is Bitcoin
Bitcoin (abbreviated BTC) is digital money that can be used to make secure peer-to-peer transactions on the internet without the need for a third party intermediary (like a bank) to facilitate transactions.
It was created by an open-source community in part due to banks’ detrimental actions during the Great Financial Crisis of 2008, which involved governments printing money and bailing out the financial institutions responsible for the crash.
At its core, Bitcoin allows the user to “be their own bank” eliminating the need to get permission from a company to complete a transaction. On the bitcoin network there are no restrictions on who a user can send money to and how much money can be sent, and operations run around the clock not just during business hours.
Beyond enabling users to “be their own bank” bitcoin also “banks the unbanked”, as financial services cost money to set up and maintain.
From initial deposits, to withdrawal, and membership fees, there are currently over two billion unbanked individuals in the world.
Bitcoin itself can be used as a store of value or medium of exchange that only exists in the digital domain. You cannot hold or see bitcoin.
The Bitcoin network and the bitcoins that power the network were created to be used on the internet, it is not owned by anyone or company — it is a true open payment network that anyone with an internet connection can access.
What can you do with bitcoin?
- Use it like money. Accepted by many companies including Starbucks and Virgin Galactic, Bitcoin can be used to make purchases.
- Transfer funds more quickly and cheaply. Funds can be transferred more efficiently (peer to peer) without high processing fees by the removal of a third party intermediary like a bank or payment processor.
- Use it as a store of value. A store of value should be worth the same or more over time. Bitcoin is often referred to as ‘digital gold’ — it’s limited in supply with specific use-cases. Amidst its volatility — bitcoin has appreciated over 15k% since conception.
How do you “get” bitcoin?
- You can buy bitcoin using fiat currency (e.g. USD, GBP, EUR) through a Brokerage or Exchange like Blockchain.com.
- You can sell something and accept payment in bitcoin.
- You can “mine” bitcoin using specialized computer equipment. (more on this below).
Do I need to buy a “whole” bitcoin?
No. Bitcoin can be bought fractionally.
For example, if bitcoin’s price is $20,000, you can purchase 0.1 Bitcoin for $2,000.
In fact, there’s a special name for the smallest unit of bitcoin that can be traded: satoshi, or sats for short. There are 100 million satoshis in one unit of bitcoin.
With market supply and demand, the price of bitcoin is always changing.
You can check the live price of a whole Bitcoin here.
Who created Bitcoin?
The Bitcoin whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System”, was published in an email list called the Cryptography Correspondence Group under the pseudonym (fake name) Satoshi Nakamoto on October 31, 2008.
A white paper is an academic document which a project team or company writes to outline the full scope of the product, including the problem that it’s solving.
The problem Satoshi Nakamoto was trying to solve was related to the current financial system and crisis that occurred in 2008.
The Bitcoin white paper explains that:
“The root problem with conventional currencies is all the trust that’s required to make it work.
The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”
In 2009, the software was publicly released and the bitcoin network was launched.
Nakamoto was still active in the project with other developers for an additional year, but in 2010 they stopped contributing and their real identity still remains unknown.
As open source software, hundreds of developers, companies and organizations contribute to Bitcoin’s code.
Bitcoin, bitcoin, or BTC?
Capitalizing or abbreviating bitcoin can be confusing. Here’s what each of these means:
Bitcoin: Bitcoin with an uppercase B is referring to the Bitcoin network and protocol. This is the system that the bitcoin currency runs on.
bitcoin: The lowercase spelling of bitcoin refers only to the cryptocurrency, not the payment network or blockchain protocol.
BTC: BTC is the abbreviated version of bitcoin, and again refers to the cryptocurrency. The use of BTC is similar to a stock ticker symbol and is what you’ll usually see on price charts.
How does it work?
The Bitcoin blockchain can be accessed and managed by any computer, anywhere in the world. The computers that run on the bitcoin blockchain are embedded with a set of rules which makes the data (bitcoins) scarce and valuable.
As a rule, only 21 million bitcoins can be produced, and this scarcity limit ultimately gives bitcoin its value.
Here’s a simple breakdown of what happens when someone wants to send bitcoin using blockchain technology.
- When someone joins the bitcoin network they are given a public key, which you can think of like an email address and a private key which you can think of like a password.
- Every bitcoin transaction made, along with the sender’s public key, is recorded in a public list called the blockchain.
- The main mechanism by which bitcoin transactions are confirmed and validated is called “mining”
- The public full list is then distributed to every computer that is connected to the Bitcoin network.
- As this public list is in chronological order of transactions, it’s possible to trace the history of all bitcoin activity that’s ever occurred. The bitcoin ledger is resistant to both tampering and censorship.
This “open” nature prevents and discourages people or “bad actors” from spending coins that aren’t theirs, making copies of coins or even reversing transactions.
You can check all transactions on the Bitcoin network on the Blockchain.com Explorer.
What is bitcoin “mining”?
Bitcoin mining consists of two processes:
- The verification of new transactions on the blockchain
- The process by which new bitcoin enters into circulation
Recap: only 21 million bitcoins will ever be produced.
Different transactions that have occurred around the same time are bundled together into “blocks” in order to add to the blockchain.
A new block containing all of the transactions that have occurred since the last block is “mined” is added to the blockchain by one “miner” roughly every ten minutes. Once added, the transactions within the block are “confirmed”.
What’s in it for bitcoin miners?
Bitcoin miners are incentivised by bitcoin rewards which they can receive in the following ways:
- If they are the successful miner who adds the new block to the blockchain
- Through transaction fees from all the transactions included in the block
To be the miner who adds the next block to the blockchain, miners must compete to solve an extremely complex mathematical problem based on a cryptographic hash algorithm.
The “answer” to the problem is called the “proof of work” and is included in the new block.
The miner who solves the puzzle fastest adds the new block to the blockchain. Mining is performed by specialized computers with very high processing power.
Listen to our podcast on, What Exactly is Bitcoin Mining? With Jaime Leverton of mining farm Hut 8.
Recap: What is the difference between cryptocurrency, bitcoin and blockchain?
Bitcoin is a cryptocurrency.
In fact, bitcoin was the first ever cryptocurrency developed. Cryptocurrency (including bitcoin) is digital money that is run on a blockchain.
Since bitcoin was created, thousands of new cryptocurrencies have been developed. Bitcoin remains the most popular however in terms of market capitalization and trading volume.
Characteristics of Bitcoin
Bitcoin is a fairly new technology, but shares many of the same characteristics of money:
Limited supply, durability, divisibility, portability, fungibility and acceptability.
Is Bitcoin safe?
Bitcoin uses cryptographic technology, which secures the information by transforming it into a format that makes it hard for unintended recipients to understand.
That’s not to say bitcoin does not come without risks, here are some you should be aware of:
- Loss of crypto keys. As with all crypto self-custody, if you lose your keys, you can lose access to your crypto funds.
- A “51% attack”. In theory, this could occur when a single miner or mining group takes majority control of the bitcoin blockchain and essentially “hacks” the network.
- Actions are irreversible. The user is ultimately responsible for what they do. When you click send on a cryptocurrency transaction, it can’t be undone.
- Unclear regulation. Although crypto and bitcoin are regulated in parts of the world such as the US, crypto assets could be subject to stricter regulations in the future.
Is Bitcoin the future?
Economic value is generated when enough people agree that something is valuable. Through this principle, money has taken many forms through the ages: shells, rocks and even cows.
One of the world’s most wealthiest individuals, Elon Musk, famously said:
“Bitcoin’s structure is very ingenious. The paper money disappears, and crypto-currencies are a much better way to transfer values than a piece of paper, that’s for sure.”
From the 20th century onward, we’ve quickly advanced from a cash-based society to plastic cards, to plastic contactless cards.
Who’s to say that bitcoin isn’t just the next iteration of money?
If you’re excited about the benefits of bitcoin and the prospect of a new financial system for the internet, you can purchase bitcoin today on Blockchain.com using the Blockchain.com Wallet.
Source link
You may like
Daily Active Addresses Hit 514,000 As DOT Price Surges 7%
Announces $1,000,000 Creator and Community Member Grants & Bybit IDO – Blockchain News, Opinion, TV and Jobs
JPMorgan Chase, Bank of America and Citibank Holding $7,427,000,000,000 Off-Balance Sheet in Potentially Dangerous Cocktail of Unknown Assets: Report
Crypto Expert Turns Bullish On Bitcoin, Predicts Quantitative Easing Will Begin Soon
US DOJ Indicts Manhattan Man on Fraud Charges Related to $43,000,000 Fake Crypto Ponzi Scheme
$120 Million Futures Liquidated As Price Takes A Beating
Bitcoin
Crypto Expert Turns Bullish On Bitcoin, Predicts Quantitative Easing Will Begin Soon
Published
8 hours agoon
May 3, 2024By
adminCrypto expert Michaël van de Poppe has made a bullish case for Bitcoin as he alluded to macroeconomic factors that could soon play out in the flagship crypto’s favor. In line with this, he urged Bitcoin investors to take action with a parabolic surge on the horizon.
An Imminent Quantitative Easing Would Be Good For Bitcoin
Van de Poppe suggested in an X (formerly Twitter) post that Bitcoin will rise on the back of a Quantitative Easing (QE), which he anticipates is “close.” He noted that the Fed has already started to “unwind Treasury buybacks and is reducing QT [Quantitative Tightening].” He claims this is happening because the economic data has worsened, which puts the US at risk of a recession.
Therefore, the Fed seeks to avoid this recession by buying back long-term government bonds and injecting liquidity into the financial system. As the crypto expert predicts, this could be good since it will force the Fed to take a more dovish stance and possibly lower interest rates, boosting investors’ confidence to go all in on risk assets like Bitcoin.
Van de Popper further predicts that this Quantitative Easing will become evident in the data released in the coming months. In line with this, he advised investors to long Bitcoin. It is worth noting that Bitcoin dropped to as low as $57,000 ahead of the latest FOMC meeting, with many investors seeming to have anticipated a hawkish stance from the Fed.
However, as the crypto expert noted, the rates remain unchanged, and Fed Chair Jerome Powell raised the possibility of a rate cut as early as June. Given Bitcoin’s price recovery since then, this development looks to have already revived a bullish sentiment among investors.
What To Expect Going Forward
In another X post, Van de Popper revealed his expectations for the crypto market going forward. He stated that Bitcoin will consolidate and go sideways (possibly ahead of the QE which will boost its price in the coming months. Meanwhile, he also expects Altcoins to “heavily outperform and rotation kicks in.”
The crypto expert had previously echoed a similar sentiment when he stated that he expects altcoins to bounce in their Bitcoin pairs while Bitcoin faces a period of consolidation that he doesn’t expect to change in the “coming months.”
Back then, he also mentioned that there would be a narrative shift to Ethereum, and he reaffirmed this belief in a more recent X post, stating that he expects a lot from the second-largest crypto token by market cap.
At the time of writing, Bitcoin is trading at around $59,100, up over 2% in the last 24 hours, according to data from CoinMarketCap.
BTC bulls reclaim control of price | Source: BTCUSD on Tradingview.com
Featured image from Seu Dinheiro, chart from Tradingview.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Source link
Bitcoin
$120 Million Futures Liquidated As Price Takes A Beating
Published
16 hours agoon
May 3, 2024By
adminThe recent dip in the price of Bitcoin below the $59,000 support level has sent jitters through the cryptocurrency market. While the price drop triggered liquidations in futures markets, analysts warn that a more significant decline could be on the horizon in the absence of a full-blown market capitulation.
Measured Retreat, Not Mass Exodus
Following the price drop, CryptoQuant, a cryptocurrency analysis platform, reported roughly $120 million in liquidated long positions (bets that the price would go up). This liquidation is noteworthy, but unlike previous selloffs at the same support level, it doesn’t signal a panicked exodus from investors. Investors seem to be taking a more measured approach, suggesting a possible short-term correction rather than a long-term bear market.
$BTC Futures Market Not Yet Signaling Capitulation
“Given the relatively small amount of long position liquidation and the lack of dramatic negative funding ratios, we believe that a ‘capitulation’ has not yet occurred in the futures market.” – By @MAC_D46035
Link 👇… pic.twitter.com/xqArLQiITf
— CryptoQuant.com (@cryptoquant_com) May 2, 2024
A Glimmer Of Hope For Long-Term Investors
While the short-term outlook appears cautious, there are reasons for long-term investors to remain optimistic. On-chain metrics, which analyze data directly on the Bitcoin blockchain, offer hints of a potential future upswing.
Metrics like MVRV (Market Value to Realized Value) suggest there’s a chance for an upward move in the larger market cycle. This information empowers strategic investors to view the current situation as a potential buying opportunity, particularly if a significant capitulation event unfolds in the futures market.
Bitcoin price action in the last week. Source: Coingecko
Navigating The Bitcoin Maze: Data-Driven Decisions Are Key
The current market volatility presents a complex challenge for investors. Understanding market sentiment is crucial for making informed decisions. The funding rate, an indicator of sentiment in futures contracts, has dipped into negative territory at times.
BTCUSD trading at $59,167 on the daily chart: TradingView.com
Traditionally, this suggests a stronger presence of bears (investors betting on a price decline) than bulls. However, the negativity hasn’t reached the extremes witnessed during past significant downturns, leaving the overall sentiment somewhat unclear.
Bitcoin’s Long-Term Narrative Remains Unwritten
Closely monitoring futures markets for signs of capitulation, along with analyzing other market indicators like the funding rate, is essential for success in this dynamic environment. Sharp investors armed with a strategic understanding of market dynamics are likely to profit from any future moves.
Bitcoin’s recent price drop has caused short-term volatility, but the long-term story remains unwritten. While the coming weeks might test investor resolve, those who can analyze market data and make strategic decisions could be well-positioned to capitalize on future opportunities.
Featured image from Pixabay, chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Source link
Altcoins
Economist Alex Krüger Goes ‘Max Long’ on Crypto Positions – Here Are His Altcoin Picks
Published
1 day agoon
May 3, 2024By
adminPopular trader and economist Alex Krüger says he’s currently “max long” on the crypto market.
Krüger tells his 173,800 followers on the social media platform X that he’s hedged and unhedged multiple times but he’s now max long in “very concentrated positions.”
The economist notes that he’s looking to “de-risk” soon. However, he acknowledges that Bitcoin (BTC) could drop as low as $52,000 after plunging below $59,000. BTC is trading at $57,093 at time of writing and is down more than 4.5% in the past 24 hours.
Explains Krüger,
“I’m not immune to bear raids. My bigger picture view has not changed: new ATHs later in the year (for Bitcoin). End-of-cycle views make little sense to me. A correction was to be expected.”
The economist also notes that he has positions in the layer-1 blockchains Solana (SOL), Toncoin (TON), Aptos (APT) and Core (CORE), as well as the decentralized data storage protocol Arweave (AR) and Bittensor (TAO), a decentralized blockchain platform that focuses on machine learning and AI.
Krüger adds that APT, CORE, AR and TAO are “much higher risk” than SOL and TON.
The economist also notes that Bitcoin had a bearish response to Wednesday’s U.S. Federal Open Market Committee (FOMC) statement.
“Very rare for price to reverse in full right after the press conference is over. And bearish, as the FOMC was dovish. And now you have trapped intraday longs. The one silver lining is BTC is trading in line with equities.”
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on X, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
Source link
Daily Active Addresses Hit 514,000 As DOT Price Surges 7%
Announces $1,000,000 Creator and Community Member Grants & Bybit IDO – Blockchain News, Opinion, TV and Jobs
JPMorgan Chase, Bank of America and Citibank Holding $7,427,000,000,000 Off-Balance Sheet in Potentially Dangerous Cocktail of Unknown Assets: Report
Crypto Expert Turns Bullish On Bitcoin, Predicts Quantitative Easing Will Begin Soon
US DOJ Indicts Manhattan Man on Fraud Charges Related to $43,000,000 Fake Crypto Ponzi Scheme
$120 Million Futures Liquidated As Price Takes A Beating
Dogecoin Mirroring Price Action That Preceded Massive Bull Runs in the Past, Says Trader – Here’s His Outlook
Is Ethereum Back? Record 267,000 New Users Spark Speculation
Economist Alex Krüger Goes ‘Max Long’ on Crypto Positions – Here Are His Altcoin Picks
Crypto Investors Bet Big On ETFSwap (ETFS) Presale To Leverage Spot Bitcoin ETFs Popularity – Blockchain News, Opinion, TV and Jobs
Bitbot’s Presale Passes $3M After AI Development Update – Blockchain News, Opinion, TV and Jobs
Dogecoin Breaks Out Of Descending Triangle Like It Did In 2021, Analyst Sets $6 Target
Bitcoin Cash (BCH) Backer Roger Ver Arrested and Charged With Evading Nearly $50,000,000 in Taxes
AppLayer Unveils Fastest EVM Network and $1.5M Network Incentive Program – Blockchain News, Opinion, TV and Jobs
Whales Dive In, But Dogecoin Price Sinks 20%: What’s Going On?
Bitcoin Dropped Below 2017 All-Time-High but Could Sellers be Getting Exhausted? – Blockchain News, Opinion, TV and Jobs
What does the Coinbase Premium Gap Tell us about Investor Activity? – Blockchain News, Opinion, TV and Jobs
BNM DAO Token Airdrop
NFT Sector Keeps Developing – Number of Unique Ethereum NFT Traders Surged 276% in 2022 – Blockchain News, Opinion, TV and Jobs
New Minting Services
Block News Media Live Stream
A String of 200 ‘Sleeping Bitcoins’ From 2010 Worth $4.27 Million Moved on Friday
SEC’s Chairman Gensler Takes Aggressive Stance on Tokens – Blockchain News, Opinion, TV and Jobs
Friends or Enemies? – Blockchain News, Opinion, TV and Jobs
Enjoy frictionless crypto purchases with Apple Pay and Google Pay | by Jim | @blockchain | Jun, 2022
Block News Media Live Stream
How Web3 can prevent Hollywood strikes
Block News Media Live Stream
XRP Explodes With 1,300% Surge In Trading Volume As crypto Exchanges Jump On Board
Block News Media Live Stream
Trending
- Altcoins2 years ago
Bitcoin Dropped Below 2017 All-Time-High but Could Sellers be Getting Exhausted? – Blockchain News, Opinion, TV and Jobs
- Binance2 years ago
What does the Coinbase Premium Gap Tell us about Investor Activity? – Blockchain News, Opinion, TV and Jobs
- Uncategorized2 years ago
BNM DAO Token Airdrop
- BTC1 year ago
NFT Sector Keeps Developing – Number of Unique Ethereum NFT Traders Surged 276% in 2022 – Blockchain News, Opinion, TV and Jobs
- Uncategorized2 years ago
New Minting Services
- Video2 years ago
Block News Media Live Stream
- Bitcoin miners2 years ago
A String of 200 ‘Sleeping Bitcoins’ From 2010 Worth $4.27 Million Moved on Friday
- Bitcoin1 year ago
SEC’s Chairman Gensler Takes Aggressive Stance on Tokens – Blockchain News, Opinion, TV and Jobs