Explaining Bitcoin: History, Characteristics, Pros And Cons

Explaining Bitcoin: History, characteristics, pros and cons

Bitcoin is a peer-to-peer decentralized network. No institution or person control. Bitcoins cannot be printed and their amount is very limited: only 21 million bitcoins can be created. 

Who created Bitcoin? 

Bitcoin was first presented as an open source software by an anonymous programmer, or a group of programmers, under alias Satoshi Nakamoto in 2009. There have been many rumors about the real identity of the creator of BTC, however, all people mentioned in those rumors have publicly denied being Nakamoto. Nakamoto himself said that he was once a 37 -year -old man who lived in Japan. However, due to his perfect English and his software is not labeled in Japanese, there are reasonable doubts about it. In mid -2010, Nakamoto happened to other things, leaving Bitcoin in the hands of some outstanding members of the BTC community. 

Satoshi also named Gavin Andresen leader developer. It has been estimated that Nakamoto has about one million bitcoins, which is equivalent to approximately $ 3.6 billion in September 2017. 

Who controls Bitcoin?

 According to Gavin Andresen, the first thing that focused after Nakamoto left the project was greater decentralization. Andersen wanted Bitcoin to continue his existence autonomously, even if ‘he would run over a bus’ ’. For many people, Bitcoin’s main advantage is its independence from world governments, banks and corporations. No authority can interfere with BTC transactions, impose transaction rates or remove money from people.

In addition, the Bitcoin movement is extremely transparent: each transaction is stored in a major public book called Blockchain. Essentially, although Bitcoin is not controlled as a network, it gives its users a total control over their finances. 

How does Bitcoin work?

 A user only sees the amount of bitcoins in his wallet and the results of the transaction. Behind the scene, the Bitcoin network shares a public accounting book called ‘Block Chain’. This biggest book contains all transactions that have been processed. Digital transaction records are combined in ‘blocks’. If someone tries to change only one letter or number in a block of transactions, it will also affect all the following blocks. Because it is a public accounting book, anyone can easily detect and correct the error or fraud attempt. The user wallet can verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to shipping addresses. Due to the verification process and according to the negotiation platform, the BTC transaction can take some to be completed. The bitcoin protocol is designed for each block late for about 10 minutes to be extracted. 

Scheme How does Bitcoin work, Bitcoin transaction? 

Decentralized Bitcoin Characteristics 

One of Satoshi Nakamoto’s main objectives when creating Bitcoin was the independence of the network of government authorities. It is designed so that all people, companies, as well as all machines involved in the verification of transactions and mining, become part of a wide network. In addition, even if any part of the network fails, money will continue to move. 

Anonymous

 These days, banks know virtually all about their customers: credit history, addresses, telephone numbers, spending habits, etc. Everything is very different with Bitcoin, since the wallet does not have to be linked to any personal identification information. And while some people simply do not want their finances to be governed and tracked by any type of authority, others could argue that drug trafficking, terrorism and other illegal and dangerous activities will prosper in this relative anonymity. 

Transparent

 Bitcoin’s anonymity is only relative, since each BTC transaction that once happened is stored in blockchain. In theory, if your wallet’s address was used publicly, anyone can know how much money there is correctly studying Blockchain’s biggest book. However, tracking a particular bitcoin address to a person is still almost impossible. Those who wish to remain in anonymity with their transactions can take measures to remain out of radar. There are certain types of wallets that prioritize opacity and safety, but the simplest measure would be to use multiple addresses and not transfer large amounts of money to a single wallet. 

Fast

 The Bitcoin network processes payments almost instantly; Normally, a person from the other side of the world takes only a few minutes to receive the money, while normal bank transfers can take several days. Not repudiable once you send your bitcoins to someone, there is no way to recover them, unless the recipient wants to return them. This ensures the reception of a payment, which means that whoever is operating with you cannot cheat it alleging that you never received the money. 

In 2009, when bitcoin was introduced for the first time, it was not very clear how and where could I spend it. Now you can buy practically everything. For example, giant companies such as Microsoft and Dell accept payments in BTC for a variety of their products and digital content. You can fly with airlines such as Airbaltic and Air Lithhuania, buy theater tickets through theater Tickets Direct from the United Kingdom, get some honest craft beer bottles, etc. 

Other options include paying hotels and buying properties, collecting invoices in several bars and restaurants, joining a dating site, buying a gift card, making a bet on an online casino and donating for a good cause. There is also an avalanche of various online markets, which trade from illegal substances to high -end luxury items. 

In conclusion, Bitcoin is a relatively new and quite complex form of payment, so it is natural that spending options remain limited, but every day more and more companies, from small local coffee shops to industry giants, accept payments in BTC. In addition, due to its exchange rate in constant fluctuation, Bitcoin became an excellent opportunity for investment.