May 24, 2024

What is Bitcoin?

Bitcoin is doing the rounds among the netizens since last 10 years, especially in the last year when it touched the $20,000 Mark (approximately). It has gained currency among the investors and traders since then. You might have heard about the term Bitcoin in the past but do you really know what actually Bitcoin stands for? If you do then you are a real Blockchain Believer but in case, if you don’t then this article, will let you know.

Fact Check

Ticker/Symbol      BTC [₿], XBT[b]

Founder               Satoshi Nakamoto

White paper        “Bitcoin: A Peer-to-Peer Electronic Cash System”

Released on        January 2009

Website                bitcoin.org

Ledger start         January 2009

Block explorer      www.blockchain.com

Circulating           ₿17.5 Million (December 2018)
supply

Total Supply         ₿21,000,000

About Bitcoin

Bitcoin is a cryptocurrency which is digital inform I like the physical form of money we use in our daily life it is decentralized in nature which can be Run without any intervention of Central Bank or any authority the concept of Bitcoin revolves around the users where the transactions are done on the basis of a sender and receiver that is peer-to-peer and Unlike the flats I do not require any intermediary for their operations the founder of Bitcoins is Satoshi Nakamoto whose identity still remains unidentified. Additionally, Bitcoin is compatible with the standardization of ISO 4217.

Bitcoin Cash (BCH) [BCH further split into BCHABC and BCHSV in November 2018] was born after the hard fork of Bitcoin. BCH had an identical blockchain but with larger block size. Bitcoin Core is the best-known implementation of Bitcoin

Units

Satoshi and milibits are the same for Bitcoins what cents are for US dollars. Satoshi is the smallest unit of Bitcoin which represent the hundred millionth part (0.00000001) of a bitcoin. Another unit which is greater in size is Milli Bitcoin which is one-thousandth part (0.001) of a bitcoin. In other terms, we can also say 1 Milli bits is equal to a hundred thousand Santoshi.

Idea behind BTC

The whole proposition of Bitcoin revolves around the decentralization of the currency humans use on the earth. The Bitcoin concept strongly advocates about the rights of the two parties sending and accepting money. It vouches for the power of using the digital currency and supports a fact that it must be in the hands of the consumers rather than any Central Bank authority. It protests against the concept of intermediaries and any third party which takes control of the transactions between two different parties.

Decentralization

Unlike the physical form of currency, Bitcoin is not held by the Central authority as it is decentralized in nature. Also, BTC is not served by any Central server storage or any private transaction protocol. Bitcoin network works on the peer-to-peer (p2p) basis and stored on a public ledger exercise on the computers or smartphones. So, in easier terms, the whole phenomena of blockchain based Bitcoin works on the principle of removing the centralization from the transactions taking place between the people.

Timeline

  1. It was 18th of August when Bitcoin.org surfaced on the internet.
  2. The Rumored founder of Bitcoin, Satoshi Nakamoto availed a paper for public named ‘Bitcoin: a peer-to-peer electronic cash system’.
  3. In January 2009 Nakamoto launched the Bitcoin software as an open source code. In the same month, he mined the first block of the chain known as the Genesis block’.
  4. First Bitcoin transaction was successfully accomplished and cypherpunk Hal Finney is regarded as the first receiver of Bitcoins (10 coins) from Nakamoto himself.
  5. By the time Nakamoto has gone missing from the public appearance, he was believed to have mined more than 1 million Bitcoins already. Before getting disappeared he handed the network key and code repositories to Kevin Anderson.
  6. After that, the first case of Bitcoin as a major proof-of-concept (POC) transactions was utilized for black markets such as Silk Road.
  7. In 2011, to purchase one Bitcoin one has to pay 30 cents to the facilitating mediums (exchanges etc).
  8. It was September 2012 when Bitcoin Foundation was surfaced. It was subjected to promote the Bitcoin’s development and growth phases.
  9. It was December 2017 when Bitcoin traced its all-time high value of $ 19,666.
  10. The state of Ohio in the US became the first government agency which allowed business to pay in terms of BTC.

Real Life Use Cases

Programmer Lazlo is the first person who utilized Bitcoin in the real word for any commercial transaction he bought two Papa John’s Pizza against 10,000 Bitcoins. By the end of September 2018, there are many big companies started accepting Bitcoins as a mode of payment. These include Microsoft, Subway, KFC, Wikipedia, Expedia, Etsy, Bloomberg Intuit and so many other well-known brands in the world.

Security

In order to access your Bitcoin repository (known as Bitcoin wallets), you need private keys which are alphanumeric in nature and in order to access your wallet you must have them in their original form. In case if you lose your private key then your ownership will be permanently lost with that wallet as it is the only legitimate evidence of your authority over the wallet. In fact, in 2013 a user already has lost 7,500 Bitcoins due to his own fault.

It is also important to know to here that Bitcoin is vulnerable to theft. Hackers and malware can scam the users with any phishing, scamming or hacking attacks. As a matter of fact, the value of stolen tokens by the end of July 2018 has already surpassed the value of 7 billion dollars.

Circulation

By the first week of December 2018 the circulation supply of Bitcoin stands at 17.5 million BTC against its maximum supply of 21 million BTC the circulation mechanism works on a protocol where reward for adding a block will be reduced to 50% every 200 10000 blocks and this process will take somewhat about 4 years to complete after it reaches its maximum limit the Record Keeping will be dance only on the transaction basis

Privacy

Unlike the fiats, the funds (read BTC) are not subjected to any real connection with the physical entities but stick to BTC addresses only. Under Bitcoin protocol all the transactions are public but the identity of the person associated with the address cannot be identified. So, transparency and encryption sail in the same boat.

Mining and energy resources

The Fiats are printed in the central bank owned printing machines but Bitcoin doesn’t work like that. Instead of artificial creation, it is generated through mining activities where the miner is awarded the amount of Bitcoin he or she mine on the blocks. Anybody under the sun can be a miner.

Though an alarming fact is associated with the Bitcoin mining. The process of mining consumes a lot of energy. As per the Global estimates of the power required by Global Bitcoin mining activities needs of up to 4 gigawatt of electricity which is up to 2 percent of the Global power consumption.

Concerns

Bitcoin is time to time criticize for the volatility and instability its prices bring in. Apart from that a lot of illegal activities and additionally the huge power requirements by BTC is also a major cause of worry. All of this pushed the various government of the world in the for a crackdown on this digital currency. Also, if we talk about the volatility that Bitcoin is subjected with, you may be surprised to know that in terms of volatility it is 7 times more volatile than gold and 18 times the to the US dollar.

(Updated on 7th December)

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