Several technical factors that affect the price trend of Bitcoin

Blockchain network performance

- Transaction speed

- The Bitcoin network can process about 7 transactions per second, which is relatively slow.

- When the network is congested, the transaction confirmation time becomes very long. For example, when there are many transactions, new transactions have to wait a long time to be confirmed. In this way, Bitcoin is not easy to use in daily transactions, investors will lose confidence, and do not want to buy or hold, and the price will be affected.

- Transaction fees

- The transaction fees of the Bitcoin network vary with the network congestion. When it is busy, the handling fees will rise very high.

- If the handling fee is too high, small transactions are not cost-effective. For example, if the handling fee is too expensive to buy a cup of coffee, no one will want to buy it with Bitcoin. In this way, the demand for Bitcoin in daily transactions will be reduced, and the price will be affected.

Technical upgrade and development

- Protocol improvement

- For example, the segregated witness upgrade.

- It separates the transaction signature data from the transaction data, allowing the block to accommodate more transactions and alleviate network congestion. This makes everyone feel that Bitcoin technology is improving, and confidence is enhanced, and the price will rise.

- Cryptographic algorithm security

- The security of Bitcoin relies on complex cryptographic algorithms, such as the SHA-256 algorithm.

- If there are major loopholes in the algorithm, hackers can steal Bitcoin or destroy the network. In this way, Bitcoin is not safe, and investors will worry about the safety of their assets and sell them in large quantities, causing the price to fall sharply.