Financial Technologies and Crypto Explainedby Admin | September 12, 2021
In 2009. the Bitcoin network was launched, the project with the purpose of creating a decentralized payment network, based on a system of immutable records, under a proof-of-work consensus that would add unhackable security and traceability of each operation. This network, strengthened with each downloaded node, was presented as one of the best options to carry out transactions in a secure and reliable way, since it would leave aside any external agent that could be molded to validate transactions. All this work described in an algorithmic formula, which provides rewards for generating difficulty in the network and thus strengthening the security of exchanges.
It sounds rather complex to believe; to stop using external agents to verify the security and validity of transactions, to leave out external manipulation in the records of each movement and to have all this security system in an automatic mechanism, self-generating and self-regulated by a mathematical formula, whose execution goes hand in hand with digital technology.
In effect this system called the Bitcoin Network is taking over monetary and information transactions; from this perspective we can find the Bitcoin Network becoming more robust every second in use and downloading of nodes. The network automatically generates rewards in exchange for the decryption of information (hash), this decryption will increase the level of difficulty of the encryption so that its security also increases. The rewards are provided to the so-called miners, in digital addresses (wallets), who have initiated the market for buying and selling these rewards, since obtaining them represents a large investment in equipment and energy consumption. Bitcoin, then, is the native cryptocurrency, offered as a reward for contributing to the improvement of the network encryption.
When we hear expressions about the support that Bitcoin has, we can already deduce that its main support is the Network itself, the use or applications, its strength in the decentralized nodes, since more than 300,000 transactions are carried out every day. This technological advance has been compared to the Internet where more and more developers and investors find intangible value.
Thus, after more than 10 years of history, Bitcoin is positioned as the cryptocurrency with the highest market support, with a capitalization of more than USDT $900 million and whose price broke historical highs a few months ago, surpassing USDT $60,000, thus opening the paradigm for a completely digital world of transactions.
Social and Institutional Adoption.
Although Bitcoin was already part of the life of many communities (programmers, digital developers, gaming, exchange centers, etc.), the institutional backing arrived to a greater extent in recent years (end of 2019, all of 2020 and so far in 2021) gives it a big push for the valorization of the Network and therefore also the cryptocurrency and the development of the cryptoeconomy.
In 2019 Blockchain.com (one of the main cryptocurrency exchanges) reported on average 31,914,414 users, by the following year the figure reached 45 million; within this same time span the amount of Bitcoin without moving from that Exchange went from 49 million to more than 65 million, this means 33% more Bitcoin in "hold" only in an Exchange.
Although obtaining absolute figures is complex regarding active users, wallets with reserve, forgotten, lost, or discarded, with or without funds, in addition to the movements in decentralized exchanges, investments through funds, stake of different platforms and other variants in the situations of reserve, use and trade of BTC; through data such as those of the Blockchain exchange and other centralized platforms we can observe the increase in the use and reserve or exchange of this crypto-asset.
The complexity to the holding and generation of trust opened more doors to institutions, international specialists in finance, private banking, high prestige investment funds, status clients curious about the wave of the Bitcoin phenomenon that sought in their broker the support to enter the crypto-ecosystem. Although the process has been long, there are now investment funds managed by institutions such as BlackRock and Grayscale whose cryptocurrency assets have diversified in line with the growing demand.