Getting Familiar With Bitcoin Terms
Bitcoin is one of the most talked-about subjects in the global financial industry. The reason for that is because this cryptocurrency managed to sky-rocket in value and reach heights like never before. As of June 2021, Bitcoin price is $40,000 and if that is not enough, many analysts believe that it will rise to $100,000 in the fourth quarter of 2021, most likely November or December.
Its massive value is what drives so many people to its platform. Some research has stated that there may be as many as 5-6 million Bitcoin traders, 100,000 of which are already millionaires. We fully understand the fact that many of you are thinking of diving into this world, which is why we wanted to help you get familiar with Bitcoin by naming and explaining some of its terms.
Let’s start things off with e-wallets. E-wallets are the storage units for your Bitcoins. Each e-wallet has different strengths, which means that you must research one that will suit your individual preferences. There are two types of e-wallets – hot and cold. Hot e-wallets are cloud-based units and you can access them at any time, while cold e-wallets arehardwares and they store your Bitcoins offline.
Mining is one of the most important processes in Bitcoin’s network. It involves solving complex puzzles with the goal of verifying transactions made with this cryptocurrency. The reward that miners get for verifying transactions is Bitcoins. Additionally, mining is free and the most cost-effective way to earn Bitcoins.
Speaking of earning Bitcoins, after you earn a certain amount of them, you can either choose to use them for online payments or to trade them. Trading is a process in which you are selling or buying Bitcoins. IT takes place at trading sites such as BitQT. To gain access to this platform, you need to register and verify your identity.
One other option for trading Bitcoins is the well-known Bitcoin ATM. But, due to the fact that they are hard to access and have tons of fees, trading sites are superior, which is why a majority of traders use those platforms.
Halvings are events that take place every 4 years and they are sort of the counterpart of mining. While the goal of mining is to release more Bitcoins into the network, the goal of halving events is to cut the flow. Think of them as Bitcoin’s Yin and Yang.
What makes halving events so interesting is the fact that they always lead to price surges. How? One of the factors that determine Bitcoin’s value is supply and demand. Since halving events make it hard for users to earn Bitcoins, the supply is drastically cut, while demand remains the same. Bitcoin is rarer and that makes it much more valuable.
The volatility measures how often is Bitcoin subject to changes in its price. Bitcoin is a highly volatile cryptocurrency, which means that it is subject to daily fluctuations. Bitcoin can rise thousands of dollars in the span of a few days, but it can also drop in value in the same period.
Blockchain is the main technology that powers Bitcoin. Mining is actually one of its sub-processes. Every transaction that users verify via mining becomes a block. The log which stores all of the recorded blocks is known as a blockchain and that is what allows Bitcoin to be self-sustainable and highly decentralized.
There are two definitions of Satoshi. The first one concerns the creator of Bitcoin, which remains a mystery to this day. The second definition is a Bitcoin sub-unit that is named after the creator. One Satoshi equals 1/100,000,000 Bitcoins.