WHAT IS BITCOIN
Bitcoin is a digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
which is included in cryptocurrency.
Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and, unlike government-issued currencies, it is operated by a decentralized authority.
All bitcoin transactions are verified by a massive amount of computing power.
There are no physical bitcoins, only balances kept on a public ledger that everyone has transparent access to. All bitcoin transactions are verified by a massive amount of computing power.
WHEN BITCOIN WAS ESTABLISHED
The domain name bitcoin.org was registered on 18 August 2008. On 31 October 2008, a link to a paper authored by Satoshi Nakamoto titled Bitcoin:
The cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto.
The currency began to use in 2009 when its implementation was released as open-source software.
The word bitcoin was defined in a white paper published on 31 October 2008. It is a compound of the words bit and coin.
No uniform convention for bitcoin capitalization exists; some sources use Bitcoin, capitalized, to refer to the technology and network and bitcoin, lowercase, for the unit of account.
HOW DOES IT WORK
Each Bitcoin is basically a computer file that is stored in a ‘digital wallet’ app on a smartphone or computer.
People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people.
Every single transaction is recorded in a public list called the blockchain.
This makes it possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies, or undoing transactions.
Bitcoin is a network that runs on a protocol known as the blockchain. The blockchain has since evolved into a separate concept, and thousands of blockchains have been created using similar cryptographic techniques. Bitcoin is really just a list. Person A sent X bitcoin to person B, who sent Y bitcoin to person C, etc. By tallying these transactions up, everyone knows where individual users stand. It’s important to note that these transactions do not necessarily need to be done from human to human.
IMPACT ON SOCIETY
Unaffected with inflation: This is one of the best features of Bitcoin as it is going to be completely unaffected by inflation. The decided quantity of Bitcoin is 21 million only hence there is no chance to face any inflation with Bitcoin.
Higher transparency in operations: As anyone can check the status of currency rates, it becomes easy and transparent to keep an easy track of the operations associated with it.
Easy to operate: The currency is all operated under digitization, which makes it easy and compatible for all to understand and use anywhere, anytime. Moreover, the concept of Bitcoin is easy and could be understood by anyone interested in investing. One can easily keep a strict track of the ups and lows of the currency rate as it can be operated online through any of the internet-supported devices.
No risk associated: As the currency is not regulated by any of the government authorities, there is a low or no risk with the currency collapse.
Need for the internet: The other factor that contributes to the negatives of Bitcoin is that it always requires a high speed of the internet to carry out the transactions. However, it is not possible to stay connected with the internet at any time. In a development phase: Though Bitcoin was launched in 2009, still, the currency is under observation. Many possible growth channels are supposed to be done completely to bring the actual potential of Bitcoin out in front of the world.
Lack of awareness: People need a special session to understand the correct optimization of these currencies in their life. There are many payment gateways that do not support Bitcoin as their currency. It becomes difficult to operate with such channels if we speak about Bitcoin.
“The key aspect of the network in Bitcoin is, I believe, using economic factors, that we can have a peer to peer distributed system where people compete and because of the competition, because of the openness, because of the game-theoretic nature of the system, that it’s going to work. That’s what it’s about.” –Dr. Craig Wright. Bitcoin is an economic system. And this brings us back to my top takeaway from video three. Think of Bitcoin as more of an economically viable system than a cryptosystem. A capitalist economic system.
In addition to competition for profit, Dr. Wright points out that if you know you can get caught, you act in a different way than if you don’t think you can get caught. Malicious miners in Bitcoin will get caught and they know this. Everyone is aware of who the big miners are and hashes are public—it’s obvious if someone (a miner) has committed fraud. It is not economically viable to commit fraud and therefore the system is secure.