A Beginner’s Guide To Bitcoin

As Bitcoin gradually moves from the fringes to the mainstream, the tides seem to be turning in the crypto world. An important factor providing the impetus to these trends is Bitcoin’s surging value, which has crossed the $64,000 mark earlier this spring. And while this digital asset’s value has since then taken a dip, analysts predict it is likely to continue its bull run during the second quarter.

Bitcoin was the first to beget the entire ecosystem of cryptocurrencies and holds prominence in the crypto world, enjoying its position as being the most sought-after cryptocurrency. Its position combined with its occasional price streaks has investors, retail, and institutional alike piling in.

But it is important to note that the crypto space is a highly volatile segment of the financial market, so you could easily find yourself in deep waters if you do not make informed decisions in time. Making decisions solely based on hype could end up costing you, as it did many investors in 2018.

Hence, performing due diligence is imperative, especially when dealing with a market that is so volatile and uncertain. However, considering the financial world’s buzz regarding Bitcoin and its untapped potential, equipping yourself with the relevant information before diving into the crypto world is a smart decision. Therefore, here are quick primers to get you started:

What Is Bitcoin?

As its name suggests, Bitcoin is an electronic currency. But unlike government-issued, or fiat, currencies, there is no central entity that issues Bitcoins or is in charge of processing its transactions.

Before Bitcoin, it was not possible to make electronic payments without the aid of a third party such as a bank or payment processor. Payments were often slow, expensive, and not available to everyone.

To solve these problems, Bitcoin operates without a trusted third party. Instead, it works purely as a peer-to-peer electronic currency. This means that payments are sent directly from one person to another.

This enables Bitcoin to function as a decentralized system, meaning it does not require the intervention of any third parties like banks or governments. It helps maintain a direct and private link between parties on both ends of the transaction. It also offers lower transaction costs due to the absence of intermediaries, making it a cheaper alternative to transferring money.

Where Does Bitcoin Come From?

Bitcoin is a digital asset, and as a result, there is no physical representation of it. Cryptocurrencies, such as Bitcoin, do not carry a central register. Instead, the crypto coins are registered on a revolutionary technology known as the blockchain. And using a process called mining, a network of computers around the globe verify and log transactions

A block of the blockchain contains details for every transaction ever made using that currency. New transactions are deposited in blocks and added to the blockchain as they occur. By validating these blocks, miners are able to earn new bitcoins in the way of rewards.

Each of the new blocks contains the answer to the puzzle from the previous block to make it valid. In exchange for solving these complex mathematical problems and validating transactions, miners are currently paid 6.25 BT per valid block mined. However, the reward is subject to the phenomenon of Bitcoin halving.

Also, the Bitcoin founding code establishes a finite supply, capped at 21 million, of which over 18.6 million coins have already been mined. The more Bitcoins mined, the more valuable and scarce this digital asset becomes.

Trading Platforms And Their Importance.

While it may drive many possible investors away, Bitcoin’s incredibly volatile nature is also one of the underlying interests for its undying popularity. Heavy and dramatic fluctuations in price continue to draw in investors and traders that hope to win big in this digital casino.

Several of them, however, are hesitant to take these risks again following the 2017 Bitcoin bubble burst. Many investors and traders, however, still unsure of how to handle this volatile cryptocurrency beast, have turned to trading platforms like quantumai as a place where they can trade safely.

With the help of advanced technologies such as Artificial Intelligence (AI) and Machine Learning (ML), as well as powerful algorithms, trading platforms are able to assist you in making profitable trading decisions. They enable the user to capitalize on fluctuations in the price of cryptocurrencies and help in maintaining profitability levels. Their auto-trading feature helps ensure crypto trading enthusiasts don’t have to spend countless hours glued to the computer screen.

For novice investors that are still learning the ropes and don’t have the expertise to make the best trading decisions, trading platforms have emerged as a safe haven.