What’s Bitcoin? The Ins And Outs Of This Cryptocurrency

Jan 4, 2019 by

Bitcoin is an electronic, or you can say, a digital currency that doesn’t exist in physical form. As such, it is not printed like other governmental currencies of different countries. It is also known as a cryptocurrency.

There’s no single institution or person that controls it and as such, it has been so often connected with the ideology of decentralization of money. Bitcoin is a direct peer-to-peer network without any intermediary. There’s a standard limit of creating bitcoins – 21 million. This means that the number of bitcoin can never exceed 21 million in the market at any given time.

❏ ORIGIN

Bitcoin was first introduced in 2009 as an open source software by some anonymous programmer, or a group of programmers under the name, Satoshi Nakamoto. But the real creator of Bitcoin is unidentified to date.

The first block of the chain was mined on January 3rd, 2009 which was known as “the genesis-block”. The first person to receive bitcoin was Cypherpunk Hal Finney.

Reasons For Its Popularity

Within a span of few years, Bitcoin has become surprisingly popular in such a way that many people have argued it could herald a new era of financial revolution in the form of cryptocurrency. Bitcoin, being the single most popular currency in the cryptocurrency market, is often referred to as Bitcoin Revolution.

The reason for the popularity of Bitcoin is its singular characteristics which we’ll discuss in brief below:

● Decentralized Nature: Bitcoin network is not controlled by any central authority. Everyone who mines Bitcoin and takes part in its transaction is a part of the network and they all work together. In simple words, there’s nobody to tinker with monetary policy or to take Bitcoins away from people. That means the one who possess it has full control over it.

● Easy to setup: Unlike traditional bank accounts, Bitcoin account is much easy to set up. One can set up a Bitcoin account within minutes or even in seconds. There are no formalities or questions asked and moreover, it is totally free.

● Privacy or Anonymity: You can hold various Bitcoin accounts at the same time without disclosing your identity. That means there’s no privacy concern while handling a Bitcoin account.

● Transparency: There’s a record of every single transaction ever to have happened from your account or anywhere in the network, in a massive version of the general ledger which is called Blockchain.

● Minimal Transaction Fee: Through traditional bank accounts, international transactions cost a decent sum of money but in the case of Bitcoin transaction it is very minimal. It may be one of the most important characteristics influencing people all over the globe.

● Speedy: As you probably already know, with the traditional money transaction, there are some restrictions on big transactions which can take several days for the amount to reflect on the recipient’s account. But Bitcoins can be transacted anywhere within a few minutes, no matter how much the amount is.

● Security Against Risk: Because of the constantly degrading currency exchange rates, many people are finding it challenging to keep up with today’s volatile economy. In such a scenario, investors could look up to Bitcoin as a security against the devaluating currency.

● Broad Application: It is no doubt that many people are getting more and more educated about Bitcoin and continuously connecting to the network. There are even various governments like Australia as well as the UK and USA that are thinking of implementing it in their government systems. Various top class companies like HSBC, Deloitte, Wipro, Accenture, etc. have started extensive research on Bitcoin. And Bitcoin ATMs have already come into the picture.

All this shows how Bitcoin has proved itself as a revolutionary innovation.

❏ HOW DOES IT WORK?

Instead of converting a radio message, Bitcoin uses cryptography to process transaction data. That’s why it is known as a cryptocurrency.

Bitcoin is created through mining which is a record-keeping service done with the help of the processing power of a computer. The cryptocurrency works with the aid of a public ledger system referred to as a lock Chain’. Combination of the digital records of the transactions makes up locks’. So the blockchain contains the record of every single transaction ever made on the network.

❏ STRENGTH IN THE MARKET

Bitcoin has faced various ups and downs in the market. It started rising in 2011 and since then, it has kept rising annually and reached its highest value of $19,783 on December 17th, 2017. After that, it started depreciating but even today, the currency has a great market share.

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