Bitcoin

London, England, 4th Nov 2021, Bitcoin is a digital, cryptographic currency. Bitcoins are not issued by any government, bank, organization or individual. Instead, the funds are created by users who “mine” for bitcoins by lending computing power to verify other users’ transactions. Users receive bitcoins in exchange for keeping the network running.

What’s significant about this innovation?

Bitcoins are unique because they can only be efficiently mined with a large amount of computing power, and because the currency is transferred directly between users without going through a financial institution. This means that transaction fees are much lower than those charged by most credit card companies or banks.

In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Victoria Coins Broker David Hunt shared that a large percentage of Bitcoin users are individuals in developing countries who may lack access to banking and at times even basic credit.

Bitcoins are also attractive because the total number of bitcoins in circulation will soon be fixed at 21 million, making them more like a commodity that cannot be created ad infinitum.

The Rising popularity of bitcoin

Bitcoin has recently become very popular. The number of purchases made with bitcoins has doubled every month over the past year, and the value of available bitcoins has increased eightfold since last April. Numerous companies now accept bitcoins as payment including blogging services, online retailers, restaurants and even some Subway sandwich shops.

Bitcoin’s technology is built around the idea of a public transaction log, recording which user owns what bitcoins. This record is called the blockchain because it is a chain of blocks of information. In addition to recording transactions between users, each new block records some or all of the most recent Bitcoin transactions between users and a special code called a “coinbase transaction.”

Bitcoins are “mined” by users who donate their computing power to verify other users’ transactions. They receive bitcoins in an exchange, and the system is built so that it becomes progressively more difficult to create new bitcoins, requiring more powerful computers to do so. A single user’s computer can get more powerful, but the system is designed so that everyone’s combined power would always be needed to mine new bitcoins.

What Are Bitcoin Whales?

In Bitcoin, a small group of entities referred to as Bitcoin whales hold large quantities of bitcoins and have the ability to exert a strong influence on the market. Mr Hunt told us that these individuals or groups can send prices skyrocketing or tanking by simply making a “trade” — offering to sell a certain amount of coins at either a higher or lower price than the going rate. Bitcoin Whales movements are known to the public because of large transactions that are broadcast on the blockchain.

Whales Can Manipulate the Market

Since Bitcoin is decentralized, it can be easy to manipulate its value. If one wallet controlled by a single individual decides to purchase or sell bitcoins, they will necessarily cause the market price to go up or down accordingly. This has been well documented in recent years when large holders of bitcoin “dumps” millions of coins on exchanges which causes prices to drop precipitously. Many speculate that this is what happened in December 2013 when bitcoin’s value went from $800 to $300 in two months.

A Recent Whale movement

Just recently, it has been reported that the world’s third-largest bitcoin whale has made a massive move by buying bitcoins that were worth more than 37 million US Dollars. Mr Hunt told us that this means the company bought 596 coins and this move has attracted all the attention of financial and crypto experts because of the massive impact it can have on the price and the volatility of the digital tokens.

What can this mean?

Mr Hunt shared that the most likely explanation for this whale’s purchase is a concerted effort to strengthen Bitcoin. By purchasing coins, the company can signal its faith in the currency by making it seem more valuable and stable. This will encourage others to buy and invest in Bitcoin as well. Whales can also signal their disloyalty by selling bitcoins. If a large holder of the currency decides to sell, even at a moderate price drop, it may trigger panic sales from those who think that the threat of a bubble is imminent and that they should cut their losses now.

Bitcoin is a complicated currency and its value is usually determined by the masses. Large holders of Bitcoin can significantly influence this process through large-scale trades which cause price fluctuations. Whales are important to the process because they encourage stability in the system, but critics worry that this stability comes at a cost. Many believe that whales can significantly control price swings and essentially render Bitcoin stable by influencing the market.

Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.

Source: Victoria Coins