What is a Bitcoin?

What is a Bitcoin?

What does this statement – Bitcoin (btc) – means in simple words? It’s a new generation of decentralized digit currency which was created to work only on the Internet. Nobody controls it, the currency emission occurs through the work of millions of computers around the world, using a program to calculate mathematical algorithms. This is the essence of Bitcoin.

What is Bitcoin and what the difference from the traditional e-money.

You can also buy anything on the Internet for Bitcoins, as for dollars, euros or rubles, and it also trades on exchanges, like the other currencies. But the most important difference between Bitcoin and all other forms of money is decentralization. There is any institution in the world which is able to control Bitcoin. Some people are at a deadlock because this means that there is any bank can control your money.

Satoshi Nakamoto
Satoshi Nakamoto

Who created a Bitcoin?

Satoshi Nakamoto was the founder (developer) of this system and offer a e-money payment system based on calculating math algorithms. The idea was to exchange coins without any central authority, electronically, more or less instantly, with the lowest possible costs. If you want to get more information about Satoshi Nakamoto, keep reading this article.

But who printed Bitcoins?

NO ONE. This currency is not printed by the Central Bank and does not work according to its rules. Banks can print as much money as possible to cover government debt, thereby devaluing their currency.

On the contrary, the Bitcoins emission is possible only in digital form and anyone can start extract or as they say mining Bitcoins at any time. Mining Bitcoins occurs by means of using the computing power of a computer in a distributed network. Transactions are processed by the same network when transferring Bitcoins, thereby turning Bitcoin into an independent digital payment system. More details about the mining of Bitcoins further in the article.

Can I mine a billion of Bitcoins?

No, you can’t. There is a restriction in the Bitcoin code, so you can “get” a maximum of 21 million Bitcoins. Despite this, Bitcoin can be divided into infinity into smaller parts, it’s the digital currency! 1 Satoshi is 0.00000001 btc (named after the creator).

How Bitcoin is provided by?

National currencies used to be provided usually with gold or silver, now GDP. Theoretically, you could come to any bank in the country, and exchange your paper money for the equivalent of gold and back. Bitcoin is not provided with anything, it’s a pure mathematics.

Any person in the whole world can run a script to extract Bitcoins on his computer and feels himself as a mini-Central Bank. The source code of the script is published in clear form which everyone can see how it works.

What the difference?

Bitcoin has a several fundamental differences.

  • Decentralization

There is none the central control body of the network. This network is distributed to all participants, where each computer that produces Bitcoins is a participant in this system. This means that none central body has the ability to dictate rules to the owners of the Bitcoins, as, say, it was in early 2013 in Cyprus. And even if some part of the network goes offline, the payment system will continue to work stably.

  • Easy to use

You need pass seven steps of hell to open a settlement account for the company in our banks, and maybe you will be denied without explanation. You cannot face with such problem with a Bitcoin, you need 5 minutes to create a Bitcoin wallet and immediately start using it. Without any questions and without any commissions. Read more about how to create a Bitcoin purse in our article.

  • Anonymity

Yes-yes. It is completely anonymous and at the same time completely transparent. You can create an infinite number of Bitcoins without reference to the name, address or any other information. But…

  • Transparency

Bitcoin stores the entire history of transactions that have ever occurred called a sequential chain of blocks or block chain. The chain of blocks knows everything. Therefore, if you have a publicly used Bitcoin address, then anyone can see how many Bitcoins you have on your account, if you did not say that this is your address, then no one will ever find out that it belongs to you. For complete anonymity, one Bitcoin address is usually used for a single transaction.

  • Low commission

Your bank can easily write off $ 50 commission for international money transfer. Bitcoin is not.

  • Transfer rate

You can send money anywhere and to anyone, they will reach in a few minutes, after the Bitcoin network processes the payment.

  • Irrevocable Transactions

After sending Bitcoin to the addressee, they cannot be returned. Only if the recipient doesn’t want to do this.

 

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