The technology behind Bitcoin

As Bitcoin keeps breaking records and its acceptance rate grows with each passing day, many experts believe that a day will come when Bitcoin will be accepted as an official payment method by governments from all around the world. Why? Bitcoin holds tons of advantages over FIAT currencies and makes them look very obsolete.

All transactions made with Bitcoin are instant, users gain a greater level of online security, and this cryptocurrency is fully optimized for online payments. Considering the fact that the number of online transactions is rising very fast, this is a great benefit. Many of us are familiar with the fact that Bitcoin is mostly used to make a profit. But, not many know about the technology that powers it, which is why we decided to take a look into this topic. Let’s begin.

Cryptography

We mentioned that users have a greater level of online security. That is due to the fact that people gain a certain level of anonymity when they trade with Bitcoin. This feature is available thanks to the method called cryptology (or also known as cryptography). Basically, cryptology uses codes as a means of communication.

These codes are able to mask the real information that is being transferred and maintain its secrecy. Thanks to these codes, users gain greater security by being provided with anonymity. Mind you, this does not mean that you are truly off the grid.

AI in trading sites

Trading sites are the platforms where Bitcoins are being sold or bought. While you may think of them as marketplaces, they represent something far greater. These sites use advanced AI systems which help traders sell their Bitcoins at the perfect time and maximize their profits.

We’ll take a very reputable site as an example to help you figure everything out. Bitcoin Circuit is a trading site whose advanced AI system collects all the data about Bitcoin on the market. After the data is collected, the algorithms analyze it and they manage to determine its future fluctuations with great precision. The fact that the daily profitability rate at this trading site is huge and there are thousands of satisfied users from all around the world speaks how effective its AI system is.

After traders receive this type of information, they know when is the best time to sell their Bitcoins and earn the highest possible profit.

Self-sustainability

FIAT currencies are controlled by banks that profit from every transaction made with them by applying added fees. Unlike them, Bitcoin is not controlled by any centre. This is a self-sustainable and highly decentralized cryptocurrency. All of the users in the network take part in the process of maintaining the stability of Bitcoin.

The fact that it is not controlled by banks means that users don’t have to pay added or hidden fees when making certain transactions. General fees for international transactions are also much lower. In other words, you can save money by using Bitcoin as a payment method. Here’s yet another proof of how user-orientated this cryptocurrency is and why people are so fond of using it.

Blockchain

Finally, we wanted to explain the main technology that powers Bitcoin – blockchain. A blockchain is a ledger that contains all the information on every transaction made with Bitcoin. By using this ledger, participants can confirm transactions without a central clearing authority.

Each transaction made with Bitcoin is called a block. Think of it this way – if the blockchain is a notebook, a block would be one page of it.

Speaking of confirming transactions, we would also like to mention that this is the pathway towards earning Bitcoins. People mine Bitcoins before selling them. This is a process in which they record transactions by solving various complex puzzles.