What is Bitcoin ?

Bitcoin is a Cryptocurrency and Worldwide Payment system. It is the First Decentralized digital currency, as the system works without a Central bank or single administrator. The network is Peer-to-Peer and transactions take place between users directly, without an intermediary.

Who created it?

A pseudonymous software developer going by the name of Satoshi Nakamoto proposed bitcoin in 2008, as an electronic payment system based on mathematical proof. The idea was to produce a means of exchange, independent of any central authority, that could be transferred electronically in a secure.

 

How This Works?

Transactions are verified by network Nodes through the use of Cryptography  and recorded in a public Distributed ledger called a Blockchain.Its also called as Mining.

 

 

 From Youtube

 

How Mining Works?

Bitcoin doesn’t have a central government.With Bitcoin, miners use Special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine.

 

 

From Youtube

Why Bitcoins?

Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value In Future.


 

 

Acquiring Bitcoins

Buy on an Exchange Many marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies

 

What ways is it different from traditional currencies?

Decentralization

Bitcoin’s most important characteristic is that it is decentralized. No single institution controls the bitcoin network. It is maintained by a group of volunteer coders, and run by an open network of dedicated computers spread around the world. This attracts individuals and groups that are uncomfortable with the control that banks or government institutions have over their money

 

Limited supply

supply is tightly controlled by the underlying algorithm. A small number of new bitcoins trickle out every hour, and will continue to do so at a diminishing rate until a maximum of 21 million has been reached. This makes bitcoin more attractive as an asset – in theory, if demand grows and the supply remains the same, the value will increase

Divisibility

The smallest unit of a bitcoin is called a satoshi. It is one hundred millionth of a bitcoin (0.00000001) – at today’s prices, about one hundredth of a cent. This could conceivably enable microtransactions that traditional electronic money cannot.

From-coindesk

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