Table of Contents
What is Bitcoin?
As the features of Bitcoin is a digital currency created in January 2009 following the depression of 2008 and the housing market crash in the USA and in most developed and developing countries worldwide.
A digital currency implies any means of payment that exists purely in electronic form. It’s not tangible like a dollar note or a coin. The payment made is accounted for and transferred using computers.
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Digital money is exchanged using technologies like smartphones, credit cards, and online cryptocurrency exchanges. In some cases, it is often transferred into physical cash, for instance by withdrawing cash from an ATM.
There are various versions of cryptocurrencies but Bitcoin today is most accepted and the most successful and widely-used form of digital money or cryptocurrencies
Bitcoin follows the ideas publish in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto. It’s still a mystery by itself whether Satoshi Nakamoto is the name of a single person, a group of persons or a ghost name given to a group of entrepreneurs.
But the concept ever since it was coin has gather tremendous currency (the punning is unintended) and is use by the multitude for all the good qualities of MONEY i.e.Any form of Money is a medium, a measure, a standard a store!
Features of Bitcoin’s efficacy also lie in the fact that it offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies by the central bank of a country.
Even the ratio of one Bitcoin to the transacted currency is so high e.g. the ratio of one dollar to one Bitcoin is a couple of hundreds which makes versatile storage.
It is an excellent transaction medium for the persons hoarding Bitcoin or is intending to make his/her transacting plans or carry in the Bitcoin wallet to make purchases in any commodity/services anywhere in the world.
Some other salient Features of Bitcoin that Fascinated the users are :
- There are no physical Bitcoins,
- Balances are kept on a public ledger that everyone has transparent access to, that – along with all the persons knowing each other transactions in records in a public ledger and protect by the number assign to them.
- Bitcoin transactions – are verified by a huge amount of computing power.
- Bitcoins are not issue or back by any banks or governments,
- Nor are individual bitcoins valuable as a commodity.
- Despite Bitcoin not being legal tender it charts high on popularity and has triggered the launch of hundreds of other virtual currencies collectively referred to as ALTCOINS ( another name of various currencies launched after Bitcoins)
What are Cryptocurrency Simple Words?
A cryptocurrency may be a sort of currency that uses digital files as money. Usually, the files are create using an equivalent method as cryptography (the science of hiding information). which makes it nearly impossible to counterfeit or double-spend.
Digital signatures is among the features of Bitcoin can be used to keep the transactions secure and let other people check whether the transactions are real.
Many cryptocurrencies are decentralize networks base on BLOCKCHAIN technology (a distribute ledger enforce by a network of computers)
A defining features of bitcoin or cryptocurrencies is that they are not issue by any central authority like a federal bank govern by the government. This makes the cryptocurrencies theoretically immune to any government interference or manipulation.
Understanding Cryptocurrencies
Cryptocurrencies are systems that leave the secure payments online which are denominate in terms of virtual “tokens,” which are represent by ledger entries internal to the system.
“Crypto” refers to the varied encryption algorithms and cryptographic techniques that safeguard these entries, like elliptical curve encryption, public-private key pairs, and hashing functions.
Understanding features of Bitcoin
While Bitcoin has been in the currency past one decade there is a definite vocabulary and mode of operation the Bitcoin buyers, sellers and traders understand.
According to the official Bitcoin Foundation:
The style notes of “Bitcoin” is written whenever there is mention of its entity or concept,
Whereas “bitcoin” is written within the small letter when pertaining to a quantity of the currency (e.g. “I traded 20 bitcoin”) or the units themselves. The plural is often either “bitcoin” or “bitcoins.”
Bitcoin is also commonly abbreviated as “BTC.”
Bitcoin literally is a collection of computers, or nodes, that all run Bitcoin’s code and store its BLOCKCHAIN.
A BLOCKCHAIN can visualize as a collection of blocks (computer stations) that are link by the internet. Each block stores a collection of transactions with a display of a public ledger that records and displays any Bitcoin transaction taken place.
Therefore no one can cheat them with features of Bitcoin transaction.
A general volume of the Bitcoin and the transaction occurring is in a public ledger and all the transaction remains transparent. One literally sees who traded the bitcoins with whom (through their identity numbers)
No one can do a fake transaction as all transactions are reflect in a public ledger that appears on a computer screen. In order to achieve a nefarious act, a bad actor would need to operate at least 51% of the computing power that makes up Bitcoin.
Perhaps this would be a near-impossible act to conspire with the population of over 10,000 nodes (and this number is growing) which makes such an attack futile.
In the event that an attack was to be perform, the Bitcoin nodes, or the people who take part in the Bitcoin network with their computer, would likely fork to a new blockchain making the attack a waste.
Some other noted features of Bitcoin are:
- Balances of Bitcoin tokens are keep using public and private “keys,” which are long strings of numbers and letters link through the mathematical ENCRYPTION (it’s a means of securing the digital data using an algorithm and a key algorithm that was use to create them.) This is another features of Bitcoin.
- The public key (comparable to a bank account number) serves as the address which is publish to the world and to which others may send or receive the bitcoins.
- The private key (comparable to an ATM PIN) is suppose to be a guard secret and only want to authorize Bitcoin transmissions.
- A Bitcoin wallet,( not to confuse with Bitcoin keys) is a physical or digital device that facilitates the trading of Bitcoin and allows users to track ownership of coins.
- Maybe the term “wallet” is a bit misleading, as Bitcoin’s decentralize nature means that it is never stored “in” a wallet, but rather decentrally parked on a blockchain like a file in a computer system. This is an important features of Bitcoin.
- Bitcoin also can “mine”. People who mine Bitcoin are known as “Miners” who process the transactions on the blockchain. They are motivate by rewards (the release of new bitcoin) and transaction fees paid in a bitcoin.
The new bitcoin being released to the miners as an incentive for mining is given at a fix rate. Ironically the rate is periodically declining.
How Bitcoin Works
Bitcoin is one of the first digital currencies to use PEER TO PEER (sharing of information data or assets without involvement )technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the Bitcoin network, are nodes or miners.
How Bitcoin works in nutshell?
- Bitcoin is a digital currency, which is transacted by a decentralize system that records transactions in a distributed ledger called a BLOCKCHAIN.
- Bitcoin miners run the complex computer rigs to solve complicated puzzles in an effort to confirm groups of transactions called blocks.
- These blocks are add to the blockchain record and therefore the miners are reward with a little number of Bitcoins.
- Other participants in the Bitcoin market can buy or sell tokens through cryptocurrency exchanges or peer-to-peer.
- The Bitcoin ledger is a features of Bitcoin that protect against fraud via a trustless system; Bitcoin exchanges also work to defend themselves against potential theft, but high-profile thefts have occurred.
BITCOIN MINING
Bitcoin can be mine! There is no mint to mine nor a bed of mining minerals like gold.
Bitcoin mining is the process by which bitcoins are released into circulation. Bitcoin mining implies solving a computational puzzle or a problem on a BLOCKCHAIN by MINERS which is mind-boggling. Upon solving such a problem a Bitcoin is earn.
“MINERS or the people who process the transactions on the blockchain. They are motivate by rewards (the release of new bitcoin) and transaction fees pay in bitcoin.
Keeping abreast of the typical western cowboy stories the word MINING in Bitcoin currency bears a similar tenacious and brave work of the Bitcoin MINERS.
Bitcoin mining is perform by high-power computers that solve complex computational math problems.
The math problems face are so complex that they cannot be solve by hand, and even compute on the high caliber computer tax the best computer knowledge specialist.
The luck and work require by a computer to solve one of these problems is the digital equivalent of a miner striking gold on the grounds or riverbed of Amazon!
The new bitcoins released to the miners are at a fixed rate.
One bitcoin is divisible to eight decimal places (100 millionths of one bitcoin). This smallest unit is referred to as a Satoshi.
Ironically the reward of mining the Bitcoin is so merger -it is presently 1 in 13 trillion!!!
But the lovers of Bitcoin continue this hard work for two reasons: One end of the hard work they produce new Bitcoin which has its high value and second by solving computational math problems, bitcoin miners make the Bitcoin payment network trustworthy and secure (it’s a kind of energizing), by verifying its transaction information.
History of Bitcoin
When Did Bitcoin Start?
Bitcoin is invent by the mysterious Santoshi Nakamoto in 2008 and released as open-source software in early 2009.
The first transaction happened between Nakamoto and an early adopter of bitcoin in January 2009.
The first real-world transaction happened in 2010 when a bitcoin miner bought two pizzas from a Papa John’s in Florida for 10,000 bitcoins.
How Bitcoin Began?
Aug. 18, 2008: The domain name bitcoin.org was register. Strangely, this domain is “Who is Guard Protect,” meaning the identity of the person who register it is not available in public information.
Oct. 31, 2008: A person or group using the name Satoshi Nakamoto makes an announcement on The Cryptography Mailing list at metzdowd.com: about a new electronic cash system that’s fully peer-to-peer, is in existence with no trusted third party.
The paper is available at http://www.bitcoin.org/bitcoin.pdf.” This link leads to the now-famous whitepaper published on bitcoin.org entitled “Bitcoin: A Peer-to-Peer Electronic Cash System.” This paper would become the Magna Carta for how Bitcoin operates today.
Jan. 3, 2009: the primary Bitcoin block is mined, Block 0. This is known as the “genesis block”.
Jan. 8, 2009: The primary version of the Bitcoin software is announce on the Cryptography list.
Jan. 9, 2009: Block 1 is mined, and Bitcoin mining commences.
Today Bitcoin is 10 years plus old. It has evolve from fledging cryptocurrency into a real-world cash alternative which is accept from economists to technologists to national governments.
What is Blockchain?
BLOCKCHAIN is a decentralized system that records Bitcoin transactions through a distributed ledger maintained in a computer.
Blockchain is literally just a chain of blocks. It is about digital information (the “block”) store in a public database (the “chain”).
“Blocks” on the blockchain are from digital pieces of data.
They Have three Parts:
Blocks store information about transactions like the date, time, and dollar amount of your most recent purchase from e.g. Amazon.
Blocks store information about your name along with Amazon.com,. Instead of using your actual name, your purchase is record with none identifying information employing a unique “digital signature,” kind of sort of a username.
Blocks store information that distinguishes them from other blocks. Each block stores a singular code called a “hash” that permits us to inform it aside from every other block.
A single block on the Bitcoin blockchain can actually store up to 1 MB of knowledge. This is an interesting features of BitcoinDepending on the dimensions of the transactions, meaning one block can house a couple of thousand transactions under one roof.
FAQ -All you wanted to know about Bitcoin.
Q-1. What is Bitcoin?
Bitcoin is a digital currency create in January 2009 following the depression of 2008 and the housing market crash in the USA and most develop and developing countries worldwide.
Bitcoin is a crypto-currency accept worldwide.
Q-2. What is cryptocurrency? Is Bitcoin a cryptocurrency?
A cryptocurrency may be a digital or virtual currency that’s secure by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralize networks support blockchain technology—a distribute ledger enforce by a disparate network of computers.
Q-3. Is Bitcoin a Cryptocurrency?
Yes! Bitcoin is cryptocurrency. Bitcoin denoted by (₿) i is a decentralized digital currency without a central bank or single administrator which controls the minting and supply of Bitcoin.
Bitcoin can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries i.e bank.
Q-4. How is the Bitcoin currency obtain?
There are 3 ways Bitcoins can be obtain.
- By either buying them on an exchange by paying the accepted conventional currencies.
- or by accepting them in an exchange of goods and services rendered.
- or by mining new ones.
Mining may be a process of adding transaction records to Bitcoin’s public ledger called the Blockchain.
Q-5. What do you mean by Bitcoin mining?
Mining may be a process of adding transaction records to Bitcoin’s public ledger called the Blockchain. This is an interesting feature of bitcoin.
Bitcoin mining is performed by high-power computers that solve complex computational math problems and the professionals who perform mining are known as MINERS.
They process every transaction by solving computational problems working from BLOCKCHAIN.
The Miners are reward with a newly create Bitcoin in return for their mining services.
Q-6. What is the need for Bitcoin?
Bitcoin has fascinated their hoarders for various reasons:
Bitcoin makes it possible to:
- Transfer the value of a large volume of money anywhere in any part of the world easily. In fact, the ratio of one unit of Bitcoin is very high so a large volume can easily be transfer easily.
- Bitcoin is secure. It can remain in a computer and easily stored by a code word. You have better control of your money.
- Bitcoin is also a useful currency for B2B transactions. In today’s fast business deals Bitcoin is an extremely handy negotiable instrument especially for advances and guarantees required in business deals to accomplish transactions across the table.
- Bitcoin is also useful for ready money for International travel buffs who sometimes need for impulsive or profitable buying.
Q-6. Who Created Bitcoin?
Bitcoin was invented by the mysterious Santoshi Nakamoto in 2008 and released as open-source software in early 2009.
The first transaction happened between Nakamoto and an early adopter of bitcoin in January 2009.
The first real-world transaction happened in 2010 when a bitcoin miner bought two pizzas from a Papa John’s in Florida for 10,000 bitcoins.
Q-7. Who Controls the Bitcoin Network?
Strangely no one controls Bitcoin. It is self-operated and has its own checks and controls which are governed by unanimous policy arrived by the Bitcoin owners spread worldwide.
The owners themselves protect the currency in their best interest.
The Bitcoin network is much like the technology behind email-no one owns.
While developers are improving the software, they can not force a change within the Bitcoin protocol because all users are liberal to choose what software and version they use.
In order to stay compatible with each other, all the users use software complying with the same rules. The bottom line is all users and developers have a strong incentive to protect this consensus and they protect the Bitcoin transactions.
Q-8. How does Bitcoin really Work?
To understand the operations of Bitcoin it can best be compared to how a mobile app or a computer program provides usage of a wallet. Similarly, the Bitcoin wallet allows the user to send and receive Bitcoin through its wallet.
Behind the scenes, a Bitcoin transaction is recorded by a public ledger called the “blockchain”. This ledger contains every transaction ever processed, allowing a user’s computer to verify the validity of every transaction.
The authenticity of every transaction is protected by digital signatures like the sending addresses, allowing all users to possess full control over sending bitcoins from their own Bitcoin addresses.
Q-9. Is Bitcoin really used by People?
Yes. There are a growing number of companies and individuals using Bitcoin. Bitcoin may be a relatively new phenomenon, it is growing fast.
As of May 2018, the entire value of all existing bitcoins exceeded 100 billion US dollars, with many dollars worth of bitcoins exchanged daily.
Q-10. How Difficult is it to make a Bitcoin Payment?
Bitcoin payments are easier to form than debit or MasterCard purchases and may be received without a merchant account. Payments are made up of a wallet application, either on your computer or smartphone, by entering the recipient’s address, the payment amount, and pressing send.
To make it easier to enter a recipient’s address, many wallets can obtain the address by scanning a QR code or touching two phones alongside NFC technology.
Q-11. Is Bitcoin Accepted by all the Countries?
No, it is still not accepted by all countries.
Although Bitcoin is now almost 10 years old, many countries still don’t have explicit systems that restrict, regulate, or ban the cryptocurrency. The decentralized and anonymous nature of Bitcoin has challenged many governments on the way to allow legal use while preventing criminal transactions
China, Russia, Vietnam, and to an extent India has restrictions over Bitcoin.
Q-12. What about other countries.?
The decentralized and anonymous nature of Bitcoin has challenged many governments on the way to allow legal use while preventing criminal transactions
The following countries have a Bitcoin ATM population.
Bitcoin ATMs by Country
- The United States. (5992 locations)
- Canada. (776 locations)
- United Kingdom. (269 locations)
- Austria. (151 locations)
- Spain. (82 locations)
- Switzerland. (75 locations)
- The Czech Republic. (64 locations)
- Italy. (59 locations)
Q-13. What is the Future of Cryptocurrency?
Some economic analysts predict a big change in cryptocurrencies is forthcoming as institutional money enters the market. Moreover, there’s the likelihood that cryptocurrencies are going to be floated on the Nasdaq. Which might further add credibility to blockchain and its uses as an alternative to standard currencies.
Some predict that each one that crypto needs may be a Verified exchange-traded fund (ETF). An ETF would definitely make it easier for people to take a position in Bitcoin, but they still need to be the demand to require to take a position in crypto, which could not automatically be generated with a fund.
Q-14. What is the Future of Bitcoin?
The emergence of Bitcoin has sparked a debate about its future with other cryptocurrencies. Despite Bitcoin’s recent issues, its success since its 2009 launch has inspired the creation of alternative cryptocurrencies such as Ethereum Litecoin, and Ripple.
A cryptocurrency that aspires to become part of the mainstream financial system would have to satisfy very divergent criteria. Perhaps Bitcoin will further get evolved with more and more participation of people, technology, and of course the miner community.
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