October 22, 2017

What is Bitcoin? Bitcoin is New Currency! CryptoCurrency

What is Bitcoin? Bitcoin is New Currency! CryptoCurrency

What is Bitcoin? Bitcoin is a revolutionary invention of the last decade. Its essential meaning is money digitization. It became the first decentralized peer-to-peer payment network for using without any central authority or middlemen. In a nutshell, bitcoin is the money for Internet.

No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.

It’s the first example of a growing category of money known as cryptocurrency.

Its original purpose is providing all people with universal currency for different operations. Bitcoin can also be described as the most prominent triple entry bookkeeping system in existence.

Bitcoin has already changed people’s understanding of currency, payment and monetary system in whole. Its crucial feature is that there is no need in third party actions as people make peer-to-peer (P2P) payments just in 5 minutes, unlike credit cards which can take up to weeks to process payment. Still wondering what is bitcoin?

What makes it different from normal currencies?

Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally. So you get some answers on question what is bitcoin?

However, bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money.

Bitcoin was created by software developer called Satoshi Nakamoto proposed bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees.

If you are wondering….

You can’t  make unlimited bitcoins!

That’s right. The bitcoin protocol – the rules that make bitcoin work – say that only 21 million bitcoins can ever be created by miners. However, these coins can be divided into smaller parts (the smallest divisible amount is one hundred millionth of a bitcoin and is called a ‘Satoshi’.

What is Bitcoin and What are Bitcoin`s characteristics?

Bitcoin has several important features that set it apart from government-backed currencies.

1. Bitcoin is decentralized

The bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together. That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown – or simply decide to take people’s bitcoins away from them.

2. Bitcoin is easy to set up

Conventional banks make you jump through hoops simply to open a bank account. Setting up merchant accounts for payment is another Longboring task, beset by bureaucracy. However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable.

3. Bitcoin is anonymous

Well, kind of. Users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information. However…there are some platforms that uses your information, just for prevent any Money Laundring using KYC (Know Your Client) procedure.

4. Bitcoin is completely transparent

Bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain.

If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. They just don’t know that it’s yours.

There are measures that people can take to make their activities more opaque on the bitcoin network, though, such as not using the same bitcoin addresses consistently, and not transferring lots of bitcoin to a single address.

5. Transaction fees are miniscule

Your bank may charge you 15 USD fee for international transfers. Bitcoin doesn’t. So now you understand why are our bankers upset.

6. It’s fast

You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment. Faster than Western Union. 😉

7. It’s non-repudiable

When your bitcoins are sent, there’s no getting them back, unless the recipient returns them to you. They’re gone forever. So please be careful when inserting your code in transaction.

Top