What is Bitcoin?
Bitcoin, abbreviated as BTC, is the most popular cryptocurrency. Bitcoin is a digital currency whose history can be traced back to an anonymous individual known as Satoshi Nakamoto. Nakamoto designed the first blockchain system in 2008, which forms the basis of operation for BTC and other cryptos. He started BTC in 2009 when he made the BTC software mainstream and mined the first block of the currency. In 2010, a team of developers led by Gavin Andresen took over the Bitcoin project. BTC grew from that point on. People use bitcoin as a medium for trading of shops and online stores. In such cases, the buyer transfers coins equivalent to the value of the purchase from his/her wallet to the retailers’ wallet.
Notably, blockchain has transcended the crypto market and is also being used in other areas as well. Being a crypto, BTC is a digital asset that is not regulated by any central body, such as the central bank. It is noteworthy that this was the main intention of the initial designers and developers. Blockchain is a network and a digital ledger that records all the transactions following approval by all the connected computers. This, therefore, makes it the most secure platform.
Fluctuations in the Value of BTC
Depending on market forces, the value of BTC either drops or rises with time. It has recently been on a downward trajectory. For instance, price manipulations, a selling craze (whereby the top traders start selling their hold consequently increasing supply), and technical factors cause a drop in the price. An increase in demand, on the other hand, causes the price to increase. It is this rise and fall in value that makes BTC an attractive investment avenue.
Traders can buy BTC when it is at a low price and hold the position until the price starts increasing, after which they sell their coins. The difference in the buying and selling prices will ensure that they earn a profit over this period.
Notably, BTC is the most influential cryptocurrency because when its price drops or increases, other cryptos follow the trend that has been set. This is partly because it has the largest market capitalization.