What is Bitcoin?

Who created Bitcoin?

The idea of ​​Bitcoin was created by an anonymous programmer, which pseudonymis “Satoshi Nakamoto“. The idea  of digital currency came to him and  in August 2008 the domain name bitcoin.org was registered. Two month later in October was passed a paper named ‘Bitcoin: A Peer-to-Peer Electronic Cash System”. He wanted to come up with a new currency that was kept in good points of previous currencies – divisibility, portability, durability, uniformity, quality and scarcity.

First bitcoin transaction was reported in May 22 2010, when bitcoin was worth US$0.08. A programmer identified as Laszlo Hanyecz in Bitcoin Forum wrote that he “successfully traded 10,000 bitcoins for pizza.” As of Dec. 2017, 10,000 bitcoins are worth about $200 million.

New currency?

Bitcoin is a set of concepts and technologies that form the basis of a digital money ecosystem. This digital currency units are used to store and transfer values between participants in the bitcoin network. It users communicate with each other using the bitcoin protocol primarily via the Internet, although other transport networks can also be used. The bitcoin protocol stack, available as open source software, can be run on a wide range of computing devices, including laptops and smartphones, making the technology easily accessible.

Users can transfer digital currency through the network to do everything that can be done using conventional currencies, such as buying and selli

ng goods, sending money to people or organizations. Bitcoin technology includes functions based on encryption and digital signature to ensure the security of the bitcoins network. Bitcoins can be purchased, sold and exchanged for other currencies in specialized currency exchanges. Bitcoin in a sense is an ideal form of money for the Internet, because it is fast, secure and unlimited.

Unlike usual currencies, bitcoins are completely virtual. There are no physical coins or even digital coins. Coins are implied in transactions that transfer value from the sender to the recipient. Every bitcoin user has his key that allows him to prove possession of transfers and opening the value to spend it and transfer it to another receiver.

Bitcoin is based on P2P system, so there are no central server. Bitcoins are created through mining process. Bitcoin mining is the process of adding records of a new transaction to the Blockchain. A blockchain is an electronic ledger of digital records, events, or transactions that are cryptographically hashed, authenticated, and maintained through a “distributed” or “shared” network of participants using a group consensus protocol.

Advantages

Payments

  • With Bitcoin you can send and receive money anywhere in the world at any time.
  • You do not need to worry about crossing borders or any other restrictions.
  • You can control your money. There is no central authority in the Bitcoin network.

Transparency

  • All completed transactions are available to everyone, but personal information is hidden.
  • Anyone can check the transactions in the Bitcoin blockchain.
  • Bitcoin protocol cannot be manipulated by anyone.

Secutity

  • Users can control their transactions.
  • Merchants can not charge a fee for an additional fee.
  • Payments can be completed without personal information.

No Taxes

  • At present, there are no fees or very low commissions as part of Bitcoin payments.
  • Digital currency exchanges help convert Bitcoins into fiat currency. These services usually have lower rates than credit cards and PayPal.

Disadvantages

  • A lot of people still don’t know about digital currencies and bitcoins.
  • Because of the advantages of Bitcoins, businesses are accepting them, nevertheless, the amount is relatively small compared to physical currencies.
  • It has volatility, generally due to the fact that there is a limited amount of coins and the demand for them is increasing every day.
  • Bitcoin is still at the conception stage with incomplete functions that are under development.

 

Bitcoin has a lot of advantages, however it has disadvantages. This is mainly due to the fact that Bitcoin is still relatively young and new currency. People are only beginning to realize it.

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