Why blockchain is essential crypto technology?

Although blockchain technology can be used today in different contexts that are not associated with Bitcoin, it still remains the most important technology for Bitcoin and other cryptocurrencies. This article will review some of the most important factors that impacted the development of Bitcoin as the cryptocurrency and its success that are connected to blockchain technology.

How Blockchain Works?

First, we will explain what the blockchain network is. The blockchain network is basically perceived as a unique data structure that consists of blocks of data. Actually, multiple transactions make one block, while each block is linked to the previous one via cryptography.

So, any attempt to change the date of the blocks is futile because the block is connected to the previous one, and for the modification of the data to be successful, the user needs to make alterations to every block of transactions in the network. This makes the system tamper-proof, and it's virtually impossible for anyone to gain this type of control over the network.

Also, blockchain technology is maintained on a cluster of computer systems across the world that is known in the Bitcoin community as nodes. They are operated by the miners- users in the network who responsible for the verification of BTC transactions.

More specifically, when someone requests to make a BTC transaction and to send BTC to another user on the network, the incoming transaction is broadcasted to the network of nodes, then it is included in another block of transactions. After the consensus mechanism is performed, the block is added to the blockchain, and the payment is completed and verified.

Online Trading

There are many trading sites that are based on blockchain in order to offer a transparent environment for trading and better results for their users.

For example, when you read the https://bitiqapp.com/, you will learn that this highly advanced system is based on blockchain and Artificial Intelligence technology. It has a top-notch performance because it is able to generate a return of investment of up to 60%. Plus, it doesn't need your constant attention because this is auto-trading software.

BTC Transactions

Everything about the BTC transactions remains transparent and viewable to the users, except for the identity of the users. Moreover, because this is a peer-to-peer-based network, the transaction fees are negligible. But, you can decide to pay a higher fee in order to give your transaction higher status and priority. Otherwise, the processing time of BTC transactions is 10 minutes.

Bitcoin's Value

The protocols of the blockchain network are one of the main components that drive Bitcoin's value. For example, Bitcoin halving is a protocol that cuts in half the reward of the miners and directly impacts the supply of Bitcoin tokens. Actually, the reward went from 12.5 BTC to 6.25 BTC, with the last halving in May 2020. As a result, the inflation rate was cut in half along with the number of BTC in circulation. It also increased the cost of mining, and overall, it makes the supply of BTC scarce.

In contrast, the demand was rising, especially over the last couple of years. So, this is why the value of Bitcoin has been soaring. Actually, Bitcoin managed to rise over 170% during 2020 after its halving in May, and it ended with a price of over $20,000, while at the beginning of 2020, it was fluctuating between $9,000 and $10,000. Moreover, in 2021 due to the increased attention from the public and the investors, the price jumped to $63,000.

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