One Bitcoin worth more than 69 thousand dollars: What is Bitcoin and how does this digital currency work?


Investors around the world are hoping that in 2024, the price of Bitcoin will once again skyrocket and the digital currency will once again regain its lost value.

And that’s because the price of the leading cryptocurrency Bitcoin is currently touching an all-time high, meaning that one Bitcoin is currently worth more than USD 69,000.

But still, the various terms used with Bitcoin such as blockchains, wallets, and ETFs remain a mystery to many people and they do not easily understand these reforms.

If you are also reading these terms for the first time then don’t worry as we are going to explain all these terms in this article.

Bitcoin

Many people may not know about cryptocurrency but everyone must have heard the name Bitcoin. But what is it?

Bitcoin is a cryptocurrency which you can also call a digital currency. It is different from the traditional world currencies such as the dollar, pound, or rupee in that it is not controlled by any authoritative financial institution.

Perhaps this is the reason why people believe that a currency that is not controlled by an institution gives them financial freedom, but on the other hand, the value of this currency is subject to uncertainty.

In February 2024, after a record decline, the price of Bitcoin started to rise sharply again and today it has reached historical levels. And it was very good news for those who have this currency.

But it is also worth noting that just a short time ago, the value of Bitcoin fell sharply, and this has happened several times before in recent times.

Blockchain

Blockchain  Bitcoin


Blockchain is a technology that not only underpins all cryptocurrencies but NFTs are also powered by it.

In common language, it can be said that it is a spreadsheet on which the buying and selling of cryptocurrency is recorded. These buy and sell are present on the sheet in the form of blocks which are connected in the form of chains.

Each cryptocurrency transaction is recorded on the blockchain with the help of a network of volunteers, and these volunteers also verify the purchase and sale of the currency through computer programs.

The benefit of Bitcoin network volunteers is that whoever verifies the transaction first is rewarded with Bitcoins.

This profitable process is called ‘mining’, but the process is also controversial because people around the world are in a race to be the first to be confirmed, and because of this, electricity is also wasted.

On reaching here, ‘Halong’ is mentioned. The total number of bitcoins in circulation around the world is 1.9 million.

But roughly every four years the number of bitcoins is halved through ‘hauling’. The new season of ‘Halong’ is expected to be held in April 2024.

Exchange Traded Funds (EFTs)

Exchange Traded Funds, or EFTs, are portfolios that allow investors to bid on multiple assets without buying cryptocurrencies.

They are traded like shares on the stock exchange and their value depends on how the entire portfolio is performing.

These portfolios can also be a combination of technology and insurance companies.

Cryptocurrency can be bought directly at its current price through an exchange-traded fund. Some EFTs contain bitcoins, but the US officially approved them in January 2024.

The move by the US has allowed new investors such as major companies like BlackRock to step into the Bitcoin world without worrying about the status of their digital wallets or crypto exchanges.

Crypto exchange

Crypto exchange

A crypto exchange is a digital platform where investors buy and sell cryptocurrencies.

Like the traditional way of doing business, a crypto exchange works like a brokerage house where people can withdraw their funds from banks and convert dollars or pounds into cryptocurrencies like Bitcoin or Ethereum.

Investors also often have to pay fees to convert traditional currencies into digital currencies.

Crypto wallet

A crypto wallet is a place where investors store their cryptocurrency. It has two types: Hot Vault and Cold Vault.

The HotVault is connected to the Internet which means that access to it is fast and the transfer of funds is also easy.

Whereas a cold wallet is like a device, usually a USB. Cryptocurrency can be stored in this device for long periods.

Ethereum

Ethereum is said to be the second largest cryptocurrency in the world after Bitcoin, which is supported by the Ether token and is also powered by the blockchain.

Its system is similar to Bitcoin and other cryptocurrencies, but in 2022 it was moved to a separate operating system that requires fewer computers and consumes less energy.

Leave a Comment