What Is Bitcoin | Features Of Bitcoin | Bitcoin Advantages And Disadvantages | How Bitcoin Works |
Bitcoin: The Most Popular Cryptocurrency In The World
Nowadays, for the sake of Facebook or YouTube, all of us may have heard the word bitcoin at some point. But many of us don’t know much about Bitcoin. What is Bitcoin? How does it work? What are the uses? Let’s find out the answers to these questions.
What Is Bitcoin?
Bitcoin is a type of cryptocurrency. And cryptocurrency is a kind of digital currency system that has no physical form. Bitcoin is currently the most popular cryptocurrency in the world.
Usually, we do not resort to a third party for money transactions. Suppose you send some money to your friend. In this case, you sent the money to your friend from your phone’s bCash / Rocket account. Here you are the sender, your friend the recipient, and the development/rocket third party, who controlled all the transaction process and charged for it.
But Bitcoin is a currency system that does not require any third party to exchange money. Bitcoin reaches the recipient directly from the sender. This system is called peer-to-peer. In this case, all the transaction processes are using cryptography which is a very secure process. Since no third-party entity controls the transaction process, it is not possible to determine the transaction speed of Bitcoin. In other words, no one can know the identity of who is sending Bitcoin to whom. Bitcoin transactions can be done with complete anonymity.
This Is How Bitcoin Came About
16 August 2006, On this day, the domain of a website called ‘bitcoin.com’ is registered in the internet world. In November of this year, an individual or a group under the pseudonym ‘Satoshi Nakamoto’ published a research paper online called ‘Bitcoin: A Peer-to-Peer Electronic Cash System’. It is in this research paper that the first idea about Bitcoin is given.
In January 2009, Satoshi Nakamoto released the code for Bitcoin software online. Bitcoin ‘mining’ software is created. Bitcoin mining is the process by which bitcoin is created. Satoshi made the world’s first bitcoin in January 2009.
Although many people have been arrested on suspicion of being Satoshi Nakamoto, it is still unknown who the real Satoshi Nakamoto is, or who is behind this name.
How Bitcoin Works
Bitcoin, like ordinary currency, cannot be traded by hand. No bank or institution controls it. Due to the peer-to-peer system, Bitcoin goes directly from the sender to the recipient’s wallet. A wallet is like your wallet, where you store your own bitcoin. The wallet is either online or offline. The online wallet can be used by the user through his smartphone or computer.
Each wallet has a specific address. It is impossible to remember that the address is completely encrypted. Users use this address for bitcoin transactions.
When Bitcoin is sent from one address to another, it is immediately recorded in an open ledger called ‘Blockchain’. It is such a huge ledger that it has a record of all the bitcoin transactions that have taken place so far. A new bitcoin is created on the network as each transaction is completed. This method is called bitcoin mining.
The Way Bitcoin Mining Is Done
Bitcoin mining is a complex process. Is done through a specific mining software. This requires a high-powered computer. This process is accomplished using some complex mathematical algorithms using the computer’s CPU and GPU.
Every bitcoin transaction is recorded on the blockchain. At this time Bitcoin miners determine the legitimacy of each transaction through mining software. And at this time a new bitcoin was created.
Bitcoin transactions and the creation of new bitcoins are all very secure. As a result, there is no possibility of any kind of deception or fraud. The identities of both parties are secret.
Some Unique Features Of Bitcoin
- Bitcoin is a completely decentralized currency system. Neither the government nor any authority controls it. As a result of the peer-to-peer system, every user here is the real owner of their bitcoin. No one else can take ownership of their bitcoin network.
- The whole process of bitcoin transactions is anonymous. A bitcoin user can open multiple bitcoin accounts. No personal information, such as username, address, etc., is required to open these accounts. As a result, the real identity of the user is kept secret.
- The bitcoin transaction process is done very transparently. Records of each transaction are stored in a blockchain that anyone can view from any part of the world at any time. As a result, there is no scope for corruption.
- Opening a Bitcoin account is very easy. In this case, it is like opening a normal bank account
- No hassle to fill out the form. No extra fees are required. No paperwork is required.
- The bitcoin transaction process is very fast. No matter which part of the world Bitcoin is sent from, it will reach the recipient in a matter of minutes.
- Bitcoin is completely non-refundable. This means that if someone sends Bitcoin to a wrong address by mistake, it is not possible to get it back.
- The Bitcoin transaction process is not controlled by any organization. The identities of both the sender and the recipient are kept secret. As a result, it is possible to use Bitcoin in many criminal activities. Bitcoin is also used to buy and sell illegal products. The secret part of the Internet is that all transactions on the Dark Web are done via Bitcoin.
- The price of Bitcoin is very volatile. Sometimes it leads to huge amount, sometimes it is called huge landslide.
Bitcoin Advantages And Disadvantages
- Bitcoin has user autonomy.
- Bitcoin transactions are pseudonymous.
- Bitcoin transactions are conducted on a peer-to-peer basis.
- Bitcoin transactions do not incur banking fees.
- Bitcoin payments are mobile-friendly.
- Bitcoin transactions are irreversible.
- Bitcoin is easy Accessibility.
- Bitcoin is very risky.
- Bitcoin server are sometimes hacked, resulting in huge losses.
- Bitcoin is not controlled by any bank or third party, it is a digital currency.
- There are still many questions about who owns Bitcoin.
- It is still not very acceptable in India as the price of Bitcoin has gone up and down.
- In India, Bitcoin or cryptocurrency can be closed at any time, so it doesn’t last long.
Q. Bitcoin Safe or Not?
A. Bitcoin is not safe.
Q. Can you lose all your money in bitcoin?
A. Yes. if you lose your crypto to a hacker, no bank is going to replace it for you.
Q. Can your bitcoin be refunded?
A. Bitcoin transaction cannot be reversed, it can only be refunded by the person who receives the funds.
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