What is Bitcoin, and How does Bitcoins Work?
We have already written an article on Cryptocurrency. If you don’t read it please first read it by going here “All About Cryptocurrency”. So you know the basics of cryptocurrencies and how they work.
So let’s start with today’s post about Bitcoin.
Hello Friends,
You here about this currency lot of time right. So the question is what is this? How it works? And why bitcoin has become so popular?
What Are Bitcoins?
“Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator” According to Wikipedia.
What the hell you are telling I don’t Understand it.
Oh! Here is in simple language
Bitcoin was the first cryptocoin currency ever invented.It is the first decentralized digital currency.
That means nobody owns or controls Bitcoin. There is no bank or central system which control your transactions.
No one knows exactly who created it cryptocurrencies are designed for maximum anonymity – but bitcoins first appeared in 2009 from a developer supposedly named Satoshi Nakamoto.
Look at above para here word used maximum anatomy and that’s why bitcoins are famous among the Dark Net Mafia.
Now everyone on darknet uses Bitcoins for the purchase of Drugs, Weapons, and other Illegal things.
Why Bitcoins Are So Controversial?
Various reasons have converged to make Bitcoin currency a real media sensation. From 2011-2013, criminal traders made bitcoins famous by buying them in batches of millions of dollars so they could move money outside of the eyes of law enforcement. Subsequently, the value of bitcoins skyrocketed.
Bitcoins & other Cryptocurrencies are highly controversial because they take the power of making money away from central federal banks, and give it to the general public.
Bitcoin accounts cannot be frozen or examined by tax men, and middleman banks are completely unnecessary for bitcoins to move. Law enforcement and bankers see bitcoins as 'gold nuggets in the wild, wild west', beyond the control of traditional police and financial institutions.
How Bitcoins Work?
“Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.” ~Bitcoin.org
Bitcoins are completely virtual coins designed to be ‘self-contained’ for their value, with no need for banks to move and store the money. Once you own bitcoins, they behave like physical gold coins: they possess value and trade just as if they were nuggets of gold in your pocket. You can use your bitcoins to purchase goods and services online, or you can tuck them away and hope that their value increases over the years.
The network is peer-to-peer and transactions take place between users directly through the use of cryptography, without an intermediary.4 These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.
How Bitcoins Are Tracked
A Bitcoin holds a very simple data ledger file called a blockchain.
Each blockchain is unique to each individual user and his/her personal bitcoin wallet. All bitcoin transactions are logged and made available in a public ledger, helping ensure their authenticity and preventing fraud. This process helps to prevent transactions from being duplicated and people from copying bitcoins.
Note: While every Bitcoin records the digital address of every wallet it touches, the bitcoin system does NOT record the names of the individuals who own wallets. In practical terms, this means that every bitcoin transaction is digitally confirmed but is completely anonymous at the same time.
So, although people cannot easily see your personal identity, they can see the history of your bitcoin wallet. This is a good thing, as a public history adds transparency and security, helps deter people from using bitcoins for dubious or illegal purposes.
Why Bitcoins?
Because there are very small fees to use bitcoins which is cheaper than conventional banking or wire transfer fees.
The Fear of Bitcoins
- Bitcoins are not created by any central bank, nor regulated by any government.
- Bitcoins completely bypass banks.
- Bitcoins are changing how we store and spend our personal wealth.
- Bitcoin transactions are irreversible.
- And the most dangerous the increase in use of bitcoins in Dark Net for illegal market deals
You can Earn bitcoins by bitcoin mining. But it requires very high-end Hardware which is not profitable in India.
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