Bitcoin
A quick overlook on what is Bitcoin.
1. Decentralized, secure and based on the laws of math
A single authority doesn’t operate the bitcoin network. Each machine that mines bitcoin and processes its transactions comprises a portion of the network. As such, a single central authority can’t alter the monetary policy and subsequently provoke a meltdown – or choose to withdraw an individual’s bitcoins, like the Central European Bank did in Cyprus in 2013. Further, if any component of the network goes offline for any reason, the money doesn’t stop moving.
2. It's free and you can get started in minutes
Traditional banks have you go through numerous processes to open a bank account. Establishing merchant accounts for payment is another complex procedure, plagued by bureaucracy. That said, you can create a bitcoin address instantaneously, hassle-free, and without paying any fees. Check out my page on Bitcoin Wallets.
3. It's private…to a degree
Bitcoins purchased through vendors can be tracked to a certain degree, having an attachment to your name. There are other methods of purchasing bitcoin that provide more privacy. Read more on - Understanding Bitcoin Addresses.
4. Transparent
Every single transaction that happens on the bitcoin network is recorded on the Bitcoin Blockchain. The blockchain is a public ledger that keeps everything in check. It records and verifies transactions through mining and people hosting nodes(downloading downloading a pc bitcoin wallet, this downloads the blockchain to your comp)
Check out Blockchain.info, there you will see a live feed of transactions on the bitcoin network.
5. Transaction fees are small
Bitcoin doesn’t charge you fees for international transfers. Your local bank may charge you as much as a £10 fee for one.
6. It’s quick
You can transfer money anywhere, and it will be received within minutes once the payment is processed by the bitcoin network.
7. It’s non-repudiable
When you send bitcoins, they’re gone for good unless the recipient sends them back to you.
Bitcoin is an electric form of currency. It is not controlled by anyone or anything. Unlike conventional forms of currency, bitcoins are not tangible. They’re created by individuals using intricate, intelligent computer programs.
Bitcoin is the premiere form of currency that is referred to as “cryptocurrency”.
What distinguishes bitcoin from traditional currencies?
You can purchase anything online with bitcoin. In that regard, bitcoin is like the traditional euro, dollar, and yen, which can also be traded digitally.
That said, bitcoin’s most distinguishing feature is that it’s decentralized. The bitcoin network isn’t regulated by any one institution. This makes many people comfortable using it since the currency can’t be controlled by a large bank.
Who developed it?
Satoshi Nakamoto was a software developer who first proposed bitcoin, which he pitched as an electronic payment system operated through provable mathematics. The concept was to create a currency that wasn’t controlled by a governing figure or establishment, that could be electronically transferred in minimal time with little to no transaction fees.
Who prints it?
Bitcoins aren’t printed. It isn’t tangible, is not accountable to people, and operates by its own rules. Banks tend to print more money to offset national debt, which undervalues their own currency.
Bitcoin takes an alternative approach with its digital currency, which is run by a community that anyone is welcome to join. Bitcoins are electronically ‘mined’ over a distributed network, which also processes transactions created with the virtual currency. As such, bitcoin is essentially its own payment network.
Why can’t unlimited bitcoins be churned out, then?
Bitcoin has systems in place that keep things copacetic. For example, a limit of 21 million bitcoins can be created by miners. That said, bitcoins can be distributed into smaller portions (the smallest amount divisible is one hundred millionth of a bitcoin, which is known as a ‘Satoshi’, named after bitcoin’s founder).
What is the foundation of bitcoin?
The foundation of traditional currency is silver or gold. In theory, you could obtain gold from a bank for a specific price. What makes bitcoin different is that it’s completely comprised of mathematics.
Across the globe, individuals are using computer programs that utilize a mathematical formula to create bitcoins. Anyone is free to use the formula.
The programs are open source, giving everyone the opportunity to assess them and ensure that they’re functioning properly.
