Mon Jun 28 06:11:26 2021

How bitcoin works, and will it crash?

Bitcoin is a type of cryptocurrency

Bitcoin is a digital currency created in January 2009. Satoshi Nakamoto is a person or group of persons that released the first bitcoin whitepaper in 2008 and worked on the first bitcoin software in 2009. Bitcoin has lower transaction fees than standard online payment methods, controlled by decentralization. Bitcoin is a type of cryptocurrency. There is no physical bitcoin; instead, balances are stored on a public ledger that everyone can see. Despite not backed by a government or central bank, bitcoin can be exchanged for traditional currencies. Bitcoin is another option for a potential investor because of the growth of digital currencies as promising as gold. People who use and transact with bitcoin is called miner. 


How bitcoin works?

Bitcoin is based on a blockchain, which is a distributed digital ledger. Blockchain is a linked body of data, made up of units called blocks that contain information about every transaction, including date and time, total value, buyer and seller, and a unique identifying code for each exchange. To be on it to the Bitcoin blockchain, a trade block must be validated by the majority of Bitcoin holders, and the unique codes used to identify users' wallets and transactions must follow the correct encryption pattern. A Bitcoin wallet is required to transmit and receive bitcoins. The actual procedure may vary depending on the wallet, but it should be similar in general. Different from bank accounts, bitcoin wallets are not insured by the FDIC. When you open your bitcoin wallet after a few transactions and begin to see multiple addresses containing lots of tiny amounts, you now know what is happening. You can send bitcoins to each other using mobile apps or their computers. It is similar to sending cash digitally.


Will bitcoin crash?

Several days ago, the bitcoin price drops below $30,000, regarding the negative environmental impact of cryptocurrency mining and renewed regulatory crackdown in China. This is the first time since January 2021. While bitcoin is down 8% on a 24-hour basis, other major coins like ether, XRP, and Cardano are nursing 10%-20% losses. Dogecoin, the joke cryptocurrency, is trading 25% lower. The rest of the top ten cryptocurrencies all saw a drop in value as a result of the early effects, including Bitcoin. This situation becomes a red alert and notices some miners that bitcoin will crash in the future. 


The chief investment officer of asset management firm Guggenheim, Scott Minerd, thinks he knows where the real bottom of bitcoin’s price is. He warns that the price of cryptocurrency could fall to the $15,000 level. 

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