The idea of the bitcoin was founded by the enigmatic and pseudonymous Satoshi Nakamoto. Bitcoin is a digital currency which means there no physical basis for it. Created in the year 2009, Bitcoin offers decreased transaction fees than conventional virtual payment methods. Another fact about Bitcoin is that unlike other currencies that are issued by the government of the state, bitcoin is controlled by a distributed authority. The sole idea behind launching Bitcoin was to create a currency structure that operates using a decentralized and distributed ledger called blockchain without involving banks and other government-issued authorities.
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Unlike dollars, euros, and yen that are currencies controlled by monetary authorities, bitcoin is an electronically held digital currency whose value is increasing day by day. For instance, when launched, bitcoin was not taken seriously by people but when its value surpassed $1000 in the early months of 2017, it took everyone by surprise. Since then, its value has been fluctuating from around $3000 to more than $17000. Bitcoin has set an example of being the first-ever cryptocurrency that has been produced by businesses and people by using an unconventional computer software system that was previously aimed at solving mathematical problems.
If you are wondering that it is the only cryptocurrency available, you might be wrong. Of course, there are other cryptocurrencies but the value of bitcoin is twice the value of 10 major cryptocurrencies combined. Today, there are 14 diverse cryptocurrencies with a value of more than $1 billion.
Bitcoin is a different currency from the conventional currencies that take part in the currency exchange process at a global level. One of the different attributes of the bitcoin is that its value is not decided by the central banks or different monetary authorities rather it is decided globally, away from the center. The only thing necessary for setting up a bitcoin address is a computer and through this address, money can easily be received and transferred. As there is no need for personal information, one can set up several address and cryptocurrency make this process secure.
Basics of a bitcoin
Bitcoin is not a currency but is a method of transfer of worth which has no dependencies on the governmental organizations. This is not like the normal transfer of money as the central banks do rather it is the transfer of value of the money. Any kind of transfer is done with a very low-cost transaction fee.
The most unique thing about bitcoin is that there is a fixed number in which bitcoin exists which is 21 million.
Basics of blockchain
Bitcoins or other virtual currencies are famous for the blockchain technology they use. You might have heard a lot about this technology but not everyone knew what it actually is. A Blockchain is a type of a ledger that is shared. The main thing about it is that it is not shared with every other person. Rather it is very personalized and is linked to the specific person of the transaction. This ledger basically records all transactions and tracks assets. Consequently, an asset can either be a tangible asset or an intangible asset.
Anything or any asset that is tracked using blockchain technology is said to be highly secure. Bitcoins use blockchain technology as a result of which they are considered highly secured and safe for use worldwide. It is the blockchain technology that makes the bitcoin system highly decentralized. It is actually a particle kind of database that stores each and every transaction information in its system. the best thing about this is that blockchain technology is not about a single computer. It is often considered as a series of small units that are linked together. You won’t find every piece of information in a single place. It is rather dispersed and secured. This is what makes it highly secure and offers decentralization. It is also independent of geographical location. These small units or computers are also called nodes.
Each node has specific information regarding a bitcoin and its transactions. Since every node is connected with each other, if any node has an error, it extracts information from other nodes and corrects itself. As a result, the chances of false information are relatively low. Furthermore, once a piece of specific information is stored in the blockchain, it cannot be reversed.
Furthermore, if someone tries to tamper with the information or changes it, the nodes cross-check the information with other nodes. As a result, it is almost impossible to change or manipulate information.
Blockchain technology also offers a high level of transparency. Because of individual nodes, security, and decentralization, you get clean information. The transaction is also superfast. For this reason, bitcoins are often extremely fast transaction as compared to banks. This is among the many reasons’ bitcoins and blockchain technology works extremely well together.
Because of the many benefits of blockchain technology, many banks, and organizations have started to incorporate this technology into their systems. As a result, this technology holds the future of the world and how transactions are going to be processed all over the world.
Although bitcoins and blockchain are two different concepts they have been working together to change the face of the world and how transactions are being carried out. It is said that the advancements of blockchain technology will lead the world into a new era of security, decentralization, and transparency.