May 15, 2020
The Simplest Way to Introduce Bitcoin & the idea of “Halving
How bitcoin works and what is bitcoin halving that you should learn about it
Bitcoin is a popular topic in the investment field since 2009. Yaonology views the opportunity of bitcoin and it is fit for someone who prefers high risk and high-profit investment. Are you still wondering what is the bitcoin? We presented bitcoin in the simplest way to let you understand the main ideas of bitcoin! To understand better of bitcoin, we recommend you to use TradingView platform with us!
What is Bitcoin?
Bitcoin is a digital currency created in January 2009. Bitcoin has lower transaction fees than traditional online payment. There are no physical bitcoins, and it is verified by a massive amount of computing power. Bitcoin is a collection of computers or nodes that run the Bitcoin’s code and it was created by a type of mathematical encryption algorithm and this is what people meant for “mining bitcoins”. The transaction process of bitcoin is transparency which everyone is enabled to see it.
How Bitcoin Works?
Bitcoin uses peer-to-peer technology to operate and no one owns or controls Bitcoin and everyone can be part of it. Bitcoin is high risk and high-profit investment. People can buy and sell in different currencies along with Bitstamp and Bitfinex. The bitcoins are stored in a digital wallet and people can pay and receive money like an online business such as credit cards and PayPal.
What Determines Bitcoin Price Go Up and Down?
The primary element to determine bitcoin go up and down is supply and demand. The first element to impact on bitcoin supplement is the growth of new bitcoin be introduced to the market. When the demand for the bitcoins higher than the supply increases, the price goes up. The second impact is that the supply might be impacted by the number of bitcoins the system allows to exist. The highest point is 21 million and when the number reaches this point, the new bitcoins cannot be created anymore. In December 2019, there are 86.2% (18.1 million) has been created.
“Halving” is the Word You Have to Know for Bitcoin
As we mentioned in the last paragraph, we learned that bitcoin might run out in recent years. Halving is now the approach to plan to reduce rewards miners receive. Halving happens every 4 years and more specifically that it happened every 210,000 blocks of transactions. The benefit of halving is to prevent inflation and protect its value if too much is printed at the same time. The recent halving happened in May 2020 and it took the price went up. The halving has happened three times as the below picture shows.