Introduction to Bitcoin: What is Bitcoin? What future holds for Bitcoins?
Published on: 2018/07/31
Abstract
Interest Category
Introduction to Bitcoin, What is Bitcoin, Cryptocurrency
Introduction to Bitcoin
In the year 2008, a person or a group of people by the pseudonym Satoshi Nakamoto created the first digital currency, which was named Bitcoin. Bitcoin is like traditional currency in terms of exchange but differs on the grounds of not being physical in nature. It is purely digital and has some key features that distinguish them from traditional currency and makes them more foolproof.
Bitcoins are decentralized in nature, which is one of its most important and interesting characteristics. Regular currency is governed by banks or government institutions. Bitcoins aren’t controlled by any such governing body.
Network of computers spread across the world are run on an open network and maintained by a group of volunteer coders. This becomes an attractive option for people who do not want their assets to be governed. Bitcoins use cryptography to solve the problem of copying or reusing of the currency. As the open network is not owned by anyone, the integrity of the transactions can be maintained.
Supply of Bitcoins
Unlike traditional currency, Bitcoins are in limited supply. Depending on the algorithm, a small number of bitcoins are released every hour with the maximum limit being 21 million bitcoins. No more than 21 million will be available at any point of time. As a result, it becomes an attractive asset owing to the increase in value.
Bitcoin transactions
Bitcoins allow pseudonymity to the users. Bitcoins can be sent and received by users without the need for any validation. The protocol checks the previous transactions of the sender and the number of bitcoins he has and then permits the transaction.
The identity of the sender or receiver is not needed here. The senders and receivers are identified by the addresses of their wallets. Since the bitcoin network is transparent, the progress of any transaction is visible to all.
The Bitcoin transactions cannot be reversed as there is no central authority that can permit the return of currency. Once the transaction is recorded on the network, modification becomes impossible. This makes these transactions tamper-proof.
Bitcoins can be bought from cryptocurrency exchanges where regular money can be exchanged for Bitcoins. Bitcoin ATM is available to change bitcoins or cash for another cryptocurrency. There are sellers who can help with the trading of bitcoins for cash. Ethereum, Ripple, and Litecoin are the most widely known cryptocurrencies after Bitcoin.