Over the last few years, Blockchain Technology Powered the Success of Bitcoin. It has continued to make headlines and achieved substantial success thanks to several bull runs, especially with the latest bullish cycle, which has pushed the price of BTC above $60,000.
This is an unprecedented moment in the history of cryptocurrency, and a lot more attention is being brought to the benefits of blockchain technology, which is the foundation of Bitcoin and other cryptocurrencies. Let’s take a look at the main advantages of this technology and how it powered the success of Bitcoin.
Blockchain Technology Defined
Blockchain technology is actually a distributed and decentralized database that is different from other databases in the way that it’s structured and how it collects information. The blockchain network verifies blocks of transactions and collects information in groups, also called blocks, and each block is chained to a previously validated block of transactions.
Otherwise, this means that the information on the blockchain network is impossible to be altered by anyone because this is a peer-to-peer- electronic cash system which means that the operations in the network are processed by its users instead of assigning a central institution to do this task.
In addition, because the BTC payments are processed within the network and by its users, that processing time is relatively short, and depending on the size of the block of transactions and its priority, the processing time can vary from a couple of seconds to 10 minutes on average. What’s more, the processing fees are very low, and they are insignificant compared to transaction fees that we need to pay when we make transactions with traditional currencies.
Boosts Online Trades
The design of the blockchain technology boosted online trading because it has protocols that make the introduction of new BTC a slower process and less rewarding to the miners. Actually, Bitcoin halving is the protocol that cuts in half the reward of the miners along with the total quantity of new BTC being produced on the network.
This means that in time the number of BTC which is circulating is decreasing compared to the demand that was reaching new heights as there is an increasing number of trading sites. Automated trading platforms like Bitcoin System are a great choice for any new users that want to start trading because they automatically execute trades, therefore, you aren’t required to have a lot of knowledge on the subject in order to open an account here. It should be noted that the transparency and security of the system are further enhanced by the use of smart blockchain technology. In order to register, deposit at least $250.
Safe BTC Transactions
Another reason why the popularity of the blockchain network is growing is due to the anonymity of the users, which makes investing in Bitcoin very appealing.
So, in other words, in addition to investing in an asset that is likely to appreciate in value over time due to its limited supply, the identity of the users that made the BTC transactions remain confidential in the network, and besides the public information regarding data about transactions, you really identity is not shared among the participants.
Hedge Against Inflation
One of the reasons why Bitcoin remained successful is that Satoshi Nakamoto, which designed the blockchain network and also worked on its development, decided to set a restriction on the total number of BTC that can ever be produced to 21 million. So, as we mentioned earlier, Bitcoin is a safe-haven asset due to this reason, and Bitcoin halving consistently decreases the current supply of BTC.
Also, it’s perceived as a good hedge against inflation because it was designed as a distributed, deflationary virtual currency, and there are specific blockchain protocols in place that regulate its inflation rate. Moreover, because it is not under the control of any authority, its value isn’t influenced by financial crises, social unrests, hyperinflation, and other events that disrupt global financial markets.
Besides, as the pool of available BTC is diminishing because we have mined 18.3 million BTC so far, the cryptocurrency has entered a bull market phase. In addition, Bitcoin is supported by investments of several accredited institutional investors and famous corporations that further increased its growth.