The digital currency Bitcoin is the talk of the hour in countries around the world because it is a new means of payment that people have not known before. It is a decentralized encrypted currency founded by Satoshi Nakamoto, but this technology has still been a source of controversy since its announcement.
What is Bitcoin?
Bitcoin is a decentralized digital currency that enables its users to make instant payments to anyone anywhere in the world. Bitcoin uses peer-to-peer technology (P2P) to operate without a central authority: the network manages transfers and issues funds.
The first developer of Bitcoin software was Satoshi Nakamoto, and he released it under the MIT license, which is open source.
Bitcoin was the first successful application of a distributed digital currency, which Wei Dai described in 1998 on his mailing list for privacy enthusiasts.
Bitcoin is based on the idea of using cryptography to issue and transfer money, without relying on central authorities. This idea comes from the fact that money is anything that the market accepts as a means of purchasing goods and services and repaying debts in any economic context.
Why do people use Bitcoin?
Bitcoin is money based on peer-to-peer technology, as mentioned, so its users consider it better than other financial systems thanks to the economic independence it provides them.
Bitcoin seeks to solve the root problem of customary money: that it needs a lot of trust to function. This is not to say that trust is a bad thing, but that trust makes systems fragile, opaque, and expensive.
False trust leads to the collapse of systems, social inequality, and monopoly. By using cryptographic proof, decentralized Bitcoin networks remove these costs of trust.
Characteristics of Bitcoin transfers
- It does not require permission, and there are no limits to it, as the application can be installed by anyone in the world, but some countries prohibit its use.
- Bitcoin transfers do not require a personal ID card, so they are suitable for those who care about privacy, and for those who live in countries with an underdeveloped financial infrastructure.
- It is not supervised, so no one can ban or freeze any financial transfer.
- Like real money, it cannot be recovered after sending.
- Fast, money arrives within seconds and becomes irrecoverable within an hour.
- It operates at all times, 24 hours a day and 365 days a year.
In addition to this, Bitcoin serves as a store of value, with some saying it is a Swiss bank account in a pocket.
Characteristics of Bitcoin money
- It cannot be printed and cannot be cheated, as there can never be more than 21 million Bitcoins.
- You don’t need space to store them, no matter how many.
- They are easy to protect and hide, as they can be stored and encrypted on a hard disk.
- Owning it is direct, so there is no fear of other parties seizing it because if you save your secret key, and the money senders confirm their transfers, no one can take your money from you no matter what they do.
How does Bitcoin work?
Bitcoin uses public-key cryptography, peer-to-peer networking, and business authentication to verify payment. Money is sent from one address to another, and one user has a large number of addresses.
Every money transfer is broadcast in the network and included in the blockchain so that the money sent is not used twice. Thanks to massive processing on the blockchain, each money transfer is blocked after an hour or two. Thanks to these technologies, Bitcoin provides a fast and reliable payment network that everyone can use.
Who is Satoshi Nakamoto?
Satoshi Nakamoto is the founder of Bitcoin and the first creator of the original Bitcoin client. He is an anonymous character about whom nothing is known, but he said in his account in the p2p foundation that he is from Japan.
Satoshi’s involvement in the development of the Bitcoin project decreased, and it ended by 2010, in addition to reports saying that Satoshi had died.
Bitcoin is arousing controversy these days, due to its ambiguity to the average user, and the mystery of its founder, called Satoshi Nakamoto, an unknown personality who claims to be from Japan.
Bitcoin works using peer-to-peer and blockchain technology, and while some countries allow it, other countries prefer to ban it “to protect citizens from its risks.”
