What is Bitcoin (BTC)

By: Finance Guider Team

How bitcoin works

At first glance, it may seem like the current system of sending payments is good enough, but all of our purchases go through a bank or credit card company, which takes a cut of the transaction. Transaction fees are increasing all the time, which is not good enough for regular users. And the fact that your account data is publicly available to the government shows its shortcomings. Bitcoin is trying to solve this problem by recording all transactions on the blockchain. This model eliminates the presence of intermediaries, as transactions are made directly between the buyer and the seller.

What is Bitcoin Cryptocurrency (BTC)

Cryptocurrency Bitcoin (BTC) is a digital currency or as they are also called Internet currency, which was created to solve all the problems of online payments. Bitcoin (BTC) is a fully decentralized digital unit, which is rightfully called money on the Internet. By the word “decentralized”, we mean that bitcoin network is not regulated or controlled by any authority. The network is supported by so-called nodes, which are used to check and confirm the operations within the network. Decentralization of the network is the main purpose of bitcoin cryptocurrency.

Technical features of the cryptocurrency Bitcoin (BTC)

Official website – bitcoin.org and www.bitcoin.com;

Year founded – 2009;

Protection method – Proof of Work;

Algorithm – SHA 256;

Trade ticker – BTC;

Maximum issue – 21 000 000 BTC.

Bitcoin was created in 2009 by an unknown programmer named Satoshi Nakamoto. There are three main ideas in bitcoin code:

– Bitcoin should not be regulated by anyone;

– The issue of bitcoins should not be infinite;

– The value of the coin is directly dependent on the demand on it.

To implement this model, the developers had to rely on blockchain technology, which was invented back in 1970, but could not be implemented until 2009. Thanks to blockchain technology, Satoshi Nakamoto, put the Bitcoin network in the hands of the network’s members, who maintain it through their computers. The bitcoin algorithm included a maximum number of bitcoins – 21 million – and the ability to mine them. A limited number of bitcoins allows to avoid the inflation of BTCs, which are mined by calculating mathematical problems, this process is called mining.

What is bitcoin mining?

To mine new bitcoin coins, users engage in mining, which means mining. You can read more about what mining is here. Bitcoin mining in 2018 has become one of the most popular ways for rich lazy people to earn money. To start mining bitcoins, you need a sum of several thousand dollars, for which you will buy special equipment. Bitcoin mining is done with the help of computer graphics processors, i.e. video cards, as well as with the help of equipment created directly for mining – Asic Miner.

Where to buy Bitcoin?

Since Bitcoin is the world’s first digital currency, it can be bought on absolutely all cryptocurrency exchanges. More recently, bitcoin futures have begun to be traded on the Chicago Mercantile Exchange. All of these factors contribute to the popularization of the cryptocurrency sphere in the global community. To choose an exchange to buy BTC, you can use our rating or go to Binance or Gate.io to buy. If after buying coins from an exchange, you want to find a wallet for storing cryptocurrency, here you will find a list of the most reliable and safe ones.

Disadvantages of Bitcoin

Despite all the advantages of bitcoin, it is impossible to highlight the obvious flaws. It is because of these flaws, we have seen a divergence of opinion among groups of programmers who are engaged in research and refinement of the code. The main reasons for the divergence of opinions are: the low bandwidth of the network and the attempts to make bitcoin controllable. At this point, bitcoin network is facing the problem of transaction delays and high transaction fees. To solve this problem, the developers decided to increase the size of the block from 2 MB to 8 MB, as a result, we saw the appearance of the cryptocurrency Bitcoin Cash. To solve the second problem – bitcoin’s controllability, part of bitcoin community wanted to ban mining with Asic Miner equipment. After that, the cryptocurrency Bitcoin Gold was born.

Conclusion.

Bitcoin is a decentralized internet currency, which was created in order to avoid state control over financial flows of people around the world. In addition, the creator of this cryptocurrency believed that the current distribution of capital is not fair, and most of the population of the world are poor.

The cryptocurrency bitcoin was created by a programmer with the Japanese name Satoshi and the last name Nakamoto in 2008, but the launch took place on January 3, 2009. But for unexplained reasons, no one has ever seen Nakamoto, so there is no information about what he looks like or if he is alive now. Although this information is probably unnecessary, because with this state of affairs, the community has no way to appeal to him and express their claims or wishes.

When developing his project, Nakamoto called it decentralized electronic currency btc, which will serve as a means of payment inside bitcoin network. This means that bitcoin is analogous to current payment systems like VISA, Master Card or SWIFT, but it is not under the control of a particular authority. All the power of this network is scattered around the world on users’ computers connected to it.

This virtual money is a new stage of development of the world financial system. On the Internet you can find the opinion that BTC is often called digital gold. And this comparison can be logically explained, because the number of cryptocurrency coins is limited, the same can be said about gold. The value of bitcoin depends on the demand for it, the situation with gold is similar.

We hope that after reading this brief overview you have clarified the picture around the question “What is Bitcoin”. That’s all my friends, read more information about digital currencies on Finance Guider – Crypto. See you all again.

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