What is Bitcoin?
Bitcoin was proposed in 2008 by Satoshi Nakamoto, who is a software developer. It was developed as an electronic payment system, and its development is based on mathematical proof. It was created as a means of exchange, and its use is independent of any central authority, unlike other means of exchange. It can also be transferred from one end user to another. The transfer is done electronically, and the process is immutable, verifiable and secure. It may surprise you that no one can say specifically who bears the name Satoshi Nakamoto.
How does bitcoin differ from the traditional currencies and what can bitcoin be used for?
You can use bitcoin to make payment electronically if both parties agree with that means of exchange. Bitcoin works like the conventional currencies, like the yen, euro, and dollars. It can also be traded digitally like several other currencies. A good knowledge of the pros and cons of bitcoin
How bitcoin differs and why use bitcoin?
• Decentralization: Bitcoin is decentralized unlike the conventional currencies; decentralization means it is not controlled by any single institution in the bitcoin network. Rather, it is maintained by volunteer coders that work in a group and also run via an open network of dedicated computers that are spread across the world. It attracts groups and individuals that are not satisfied with the control of government institutions, and banks have over money.
• Limited supply: There is an unlimited supply of fiat currencies, like the yen, euro, and dollars since central banks can issue as many of them as they like. These banks can equally manipulate the value of any currency about another for improving the proof of stake. The cost of the manipulation is borne by individuals holding the currencies, especially by citizens that have alternatives.
• Pseudonymity: Those who use bitcoin can operate in semi-anonymity unlike the end users of traditional electronic payments, who are usually identified for various purposes, like verification purposes and compliance with anti-money laundering, as well as other legislation. End users are not required to identify themselves when they are sending or receiving bitcoins to or from another end user. The protocol checks every transaction that is submitted
• Immutability: Bitcoin is irreversible once it is sent; this is unlike electronic fiat transactions. The irreversibility is due to the absence of a central adjudicator that can ratify the return of the money. The modification is not possible after up to one hour of completing the transaction. The benefit of this is that it is not possible to tamper with any transaction carried out on the bitcoin network.
• Divisibility: Satoshi is the smallest unit of the bitcoin. The value of one Satoshi is one hundred millionth of a bitcoin; that is 0.00000001. This represents about one-hundredth of a cent. The divisibility makes microtransaction very easy.