What Are The Most Common Questions About Bitcoin?
Bitcoin’s network is ever-growing. This cryptocurrency has reached heights that no other product or service has even managed in history. As of early April, the price for 1 Bitcoin exceeds $55,000 and experts believe that the best is yet to come.
The chance to make a profit is what drives thousands of people to register to this network with each passing day. When most people sign up to get more familiar with Bitcoin, they have tons of questions about the cryptocurrency. We decided to take a look at some of the most common questions and provide you with an answer to them. Let’s check them out.
Who Is The Creator?
The biggest mystery that is connected to Bitcoin is its creator’s name. To this day, nobody knows who invented Bitcoin. We don’t know this individual’s age, gender, or nationality. All that we are familiar with is that he/she goes by Satoshi Nakamoto.
Many people and media outlets have speculated as to who Satoshi might be, but nothing has been confirmed. Some people believe that the name is not an individual, but a group of people around the world who have worked together on the Bitcoin project.
Since the release of that cryptocurrency, multiple people have claimed or been “accused” of being Satoshi. One of the accused is Hal Finney. A cryptographic pioneer and one of the first people to use the 0.1 version of the Bitcoin mining software. He is also one of the first people to make a transaction with the coin.
Nick Szabo, Dorian Satoshi Nakamoto, Craig Wright, and many others were candidates for the legendary name, but there is never enough evidence to get to the truth.
Satoshi even became a term in this cryptocurrency. 1 Satoshi is a Bitcoin subunit and it equals 1/100,000,000 Bitcoins.
How do You Make Money with Bitcoin?
Trading sites are at the center of the process of making money with Bitcoin. First, traders earn their Bitcoins through mining (we’ll explain this term later on) and then they register at these sites. Once registered they can start trading the cryptocurrency they have earned for other coins or even for fiat money.
In other words, Bitcoin by itself isn’t exactly worth a certain number of dollars. One Bitcoin is just one bitcoin. However, these trading sites and the traders specify how much the coin is worth in dollars. As more people purchase it, its value continues to rise.
Right now, people see it and use it as a stock. Very similar to buying and selling stocks of a certain company. However, that may change in the future as cryptocurrency becomes normalized around the world.
Remember, finding a reputable trading site is a key factor that can make all the change in how much profit you make.
Let’s take one of the most trustworthy sites on the planet – Bitcoin Billionaire. Apart from acting as a marketplace, Bitcoin Billionaire also uses advanced software that scans the market and collects all relevant data about Bitcoin. The data is used to make assumptions on how will Bitcoin fluctuate in the near future. Considering the fact that this platform has a very high daily profitability rate, the software at this site is very accurate in its predictions. That is the reason why it counts thousands of registered users from all around the world.
What Is A Blockchain?
Blockchain is the technology that powers Bitcoin and makes it possible for it to be self-sustainable and highly decentralized. It consists of blocks. Every block is a Bitcoin transaction. And if you are wondering how do these transactions are recorded when banks are excluded, you can thank mining for that.
Mining is in fact, a process in which you record and verify Bitcoin transactions. Each recorded transaction rewards the miners with Bitcoins.
What’s The Purpose of Halving Events?
Halving events are one of the most important processes in the network, together with mining. They take place every 4 years or when a total of 210,000 Bitcoins are mined. The purpose of this event is to control the flow of Bitcoins in the network. That is why the circulation of Bitcoins is cut drastically during halvings and it becomes extremely hard to mine them. Since Bitcoins become hard to obtain, their value always increases after halving events end.
In 2021, mining one entire Bitcoin is almost impossible if you don’t have the right equipment. Some of the best mining equipment, such as the Antminer S19j can mine about 0.01635 of the coin in one month. That would result in just 0.1989 Ƀ in one year. It would take five years to obtain one Ƀ. However, in five years, a halving event could occur, making it even more difficult to mine one BTC.
So far, there have been 3 halving events and all of them spiked Bitcoin’s value. The last one took place in May 2020, and as you can see, Bitcoin managed to break the $50,000 barrier after it finished.
What Does the Volatility Rate Measure?
The volatility rate measures the likeliness of changes in Bitcoin’s value. As you may know, Bitcoin has a very high volatility rate, which means that its value changes daily. The Tesla investment serves as a great practical definition. After the company invested 1.5 billion dollars in Bitcoin, its value went from $38,000 to $50,000 in less than days.
Because of these sudden changes in value, we use the term volatile.
Imagine this. You put $1000 into this crypto on Monday morning. On that same Monday, Elon Musk posts a tweet that Tesla is going to sell all of those 1.5 billion dollars in BTC and --executes the decision. The price of the coin could drop from $50,000 to $25,000 in a matter of hours or even minutes. Reducing your original $1000 dollar investment into $500.
Keep in mind, this same example can go the other way around. Your $1000 could turn into $2000 in a day.
It is quite apparent that cryptocurrency is not going to take a step back any time soon. It will continue growing and expanding into a market that’s valued just as much as the stock market is valued today.