One of the mysterious things about Bitcoin that has not been revealed to date is, who created the virtual currency..
As is known, Bitcoin increasingly stealing the attention, especially because the price per puck penetrate USD 10,000 or Rp 135 million for the first time recently.
Bitcoin was developed in 2008 by an anonymous person. When it's launched, it's only a few cents. Who would have thought, its value continues to skyrocket.
By the end of August 2013, the total value of Bitcoin in circulation already exceeds USD 1.5 billion with a total transaction worth millions of dollars every day. In the past five years, Bitcoin's value has gone up by 40,000%.
Answering the puzzle of who created Bitcoon, came the name of Satoshi Nakamoto. This is the name used by strangers or people who make Bitcoin for the first time.
Bitcoin is an electronic money made in 2009 by Satoshi Nakamoto. The name is also associated with the open source software that he designed, and also uses a peer-to-peer network without centralized storage or a single administrator where the US Treasury calls the bitcoins of a decentralized currency. Unlike most currencies, bitcoin does not depend on trusting major publishers. Bitcoin uses a database that is distributed and spreads to the nodes of a P2P network to a transaction journal, and uses cryptography to provide basic security functions, such as ensuring that bitcoins can only be spent by people owning them, and never be done more from one time.
Bitcoin uses peer-to-peer technology to operate, without central or central bank authority; transaction management and bitcoin publishing are done collectively by the network. Bitcoin is an open source; the design is general, no one is the owner and control of Bitcoin and everyone can take part. By its unique nature, Bitcoin enables ways of usage that other payment systems can not do before.
Basic Technical Analysis of Bitcoin
Different from fundamental analysis, Bitcoin's technical method relies more on price monitoring already presented in the chart. The technicalist (chartist) uses a practical approach that detects historical data on price charts, with a variety of analysis tools to gain better understanding and prediction. By applying technical analysis, a Bitcoin trader can know the direction of trends, market sentiments, and key levels that become the limit of important price movements.
The design of Bitcoin allows for anonymous ownership and transfer of wealth. Bitcoin - bitcoin can be stored on a personal computer in a wallet file format or stored by a third party wallet service, and apart from all that bitcoin can be sent over the internet to anyone with a Bitcoin address. The peer-to-peer bitcoin topology and the lack of a single administration make it impossible for any governmental authority to manipulate the value of bitcoin - bitcoin or cause inflation by producing more bitcoin.
Well, what are the basics of technical analysis that need to be considered in Bitcoin trading?
Dow Theory
Almost every technical analysis in all instruments is based on Dow Theory. It is quite natural, considering the principles it contains contains the most basic and the very first idea of technical analysis. That being said, understanding Dow's Theory is tantamount to studying the technical analysis itself.
There are 3 essences of Dow Theory that can guide you to understand technical analysis more easily, including:
Market shows everything. Whether it's the past, the present, or the future prediction, it's all recorded on the chart. In the case of Bitcoin, the calculated variables are demand in the past, present, and future, as well as regulatory changes that may affect the value of Bitcoin.
The current price shows all the information a technical trader needs to take a position, including the knowledge and expectations of Bitcoin market participants.
-History always repeats. This principle is motivated by the assumption that market psychology is actually predictable. The proof can be seen from the common behavior of most traders when prices move in a pattern or at certain levels.
- Price movements are not entirely random, as they usually follow trends that are formed in the short or long term. Once a trend is created, the price will tend to follow the pattern. That's why traders are always trying to estimate the best trends possible. The better they can identify their direction and strength, the greater the profitability they can accumulate.
Volume
In Bitcoin trading, volume plays an important role in evaluating price trends. In fact, knowing the direction of the trend alone is not enough to predict future price opportunities. If the price is uptrend but the buyer's volume is actually likely to slow down, then most likely the price will end its rise shortly thereafter. So to further ensure the continuity of a trend, also know how the state of Bitcoin volume.
The chart below shows that the strengthening of a convincing price trend is accompanied by an increase in Bitcoin volume:
Trend
Trend identification is one of the most important keys in any technical analysis of trading assets, including Bitcoin analysis. Strengthening prices in one direction indeed brings an impressive opportunity for spot traders who take profit from the difference in price movements. Let's say the price is currently in a strong uptrend, then the trader can take a buy position and close it when the price goes higher.
To know the direction of the trend, the technicalists usually observe the pattern of high and low prices on the chart. If the high continues to form at a level higher than before (higher high), then it can be said if the price is currently experiencing an uptrend. The reverse is true for downtrend identification (seen from lower low).
Nevertheless, not a few traders who prefer to use tool aids, such as Moving Average (MA) which is specifically created to smooth the reading of the direction of price trends on the chart. Furthermore, MA can be utilized to know the momentum change, through placing 2 MA lines with different periods and observing the crossing moments of both.
The example graph above proves that SMA (Simple Moving Average) with period 5 and 20 crossed when price changed direction trend and momentum.
Support Resistance
Where there is technical analysis, there will always be support resistance. This basic method has always been an important component in the strategy of every trader, not to mention those who are fundamental.
Support itself is basically the limit created by the trader's deal if the current price has reached the oversold level (oversold). On the other hand, the resistance is formed as a "roof" that limits the price through a level, which is considered an overbought limit by the market participants.
If the price complies with the support resistance, then the trading decisions can be taken quite easily. By following the pattern and behavior of the market, you stay ready to open buy after the price bounces off the support, or open a sell position when the confirmed price fails to break the resistance.
However, if the price penetrated the support or resistance (especially that has been tested several times), then the price will usually breakout and move stronger in a trend; uptrend if the price breakout of the resistance, downtrend if the price breaks the support level. In this situation, there is more profit to be expected because the breakout is usually supported by high volatility to form a new trend.
# The final word
In addition to the basic principles in Dow Theory, Bitcoin's technical analysis also takes note of trends, support resistance, and volume. These aspects can be key and are further explored, as there are now many indicators and methods developed from the basics of the analysis.
However, it should be noted that technical analysis also has shortcomings that need to be well anticipated, ie tend to be lagging (too late). Because it only relies on charts showing past price movements, technicalists tend to override the fundamental factors that drive the price itself. Although the basic principle is made that way, it is too slow to respond to price changes (especially when volatility is volatile) will cause many losses.
Therefore, it should balance the technical and fundamental analysis of Bitcoin trading. Even if you are more inclined to technical methods, be sure to stay up to date with the latest news, so at least you do not get stuck open technically when the price is being heavily influenced by a big impact fundamental event.
Bitcoin is the first implementation of the so-called cryptocurrency, first described by Wei Dai in 1998 in the cypherpunks mailing list. Bitcoin relies on the amount of transfer between public accounts using public key cryptography. All transactions are open to the public and stored in a distributed database.
If in 2013, 1 BTC was rewarded with $ 20; another in 2017, a fee of $ 20 charged for 1 BTC transaction. With continuous prices setting a record high, rapidly growing mainstream adoption, and media attention; many people are increasingly believing in the phenomenal development of Bitcoin, and want to take part in the world. However, there is a dark side that has never been noticed by the public recently, namely the swelling of cost per transaction in the Bitcoin blockchain network.
Currently it is noted that for 1 BTC transaction it will cost you $ 20. In contrast to the previous few years that only cost about $ 0.1 - $ 0.3 only. This automatically becomes a big challenge for the new currency being seeded in order to destroy the current conventional financial system.
After reaching the range of 20,000 US dollars per chip in December, this week the value of virtual currency Bitcoin recorded had decreased to below 10,000 US dollars.,
On Tuesday afternoon (16/1/2018), at about 17:30 east of the United States, the Coinbase exchange traded Bitcoin with a value of 9.969 US dollars, while Bittrex at 9,450 US dollars.
Bitcoin is not the only virtual currency whose value is trimmed. The CoinMarketCap site noted the top 20 cyrptocurrencies all decreased by double digits in the last 24 hours.
During that period, the value of Bitcoin fell 17 percent, and Ethereum had fallen 19 percent so it had touched the value of 854 US dollars before rising back to the range of 1,000 US dollars.
Meanwhile, Ripple, the third-largest virtual currency of the market capitalization aspect, experienced a sharp decline of 46 percent to nearly 90 cents, before returning to 1.18 dollars.
# Why Transaction Costs Swell?
The problem of cost swelling occurs because Blockchain Bitcoin's Blocked Scalability (Blocksize / Block Size) is too full of transactions that occur every second. As a result, then there is swelling in each side of the network, resulting in greater transaction costs imposed to reduce transaction traffic.
However, as we can see, Bitcoin transaction traffic is increasingly booming, reaching even hundreds of billions of US Dollars. This of course exacerbates the problem, let alone coupled with the failure of some Hard Forks that want to be done to improve and enlarge the scalability.
Solutions for Bitcoin Scalability Problems
Actually there is SegWit (Segregated Witness) that can be applied to Bitcon Wallet providers, so the size of each transaction that happens can be reduced to only a third. However, manual implementations that should be performed by the service providers, as well as the lack of developers, are still the main reason not to adopt the SegWit into their platform.
Then, there is also a Lightning Network that also seeded can reduce the transaction burden on Blockchain Bitcoin network, but again this solution also can not be implemented on Bitcoin network..
Impact of Swelling Costs
The worse the scalability problem causes the increasing cost per transaction, and indirectly makes Bitcoin only for high-end transactions only. Even if we look at the international forum Reddit, has many complaints are thrown like:
"I can not send $ 5 worth of Bitcoin without a $ 15 transaction fee; is this what we call the currency of the future?"
"Paying a $ 20 million fee for a $ 10 million worth of Bitcoin seems reasonable, but paying the same amount to send $ 100 worth of Bitcoin looks very silly."',",
If this problem is not resolved soon, it is possible that there will be more constraints on the future Blockchain network. Moreover, some Hard Fork has not been done completely to improve Bitcoin Scalability.