Bitcoin Cryptocurrency Review
What is Bitcoin?
Bitcoin is a new type of payment network and a new type of currency.
A more professional definition would be the first decentralized digital currency you can transfer through the internet.
- Direct transfer between two parties.
- No need for third party interference, like a bank or a clearance house.
- Lower transfer fees than other options as a result of direct payment.
- Same currency in every country.
- Participating parties are anonymous (Some might consider as a disadvantage).
- Highly volatile to trade and currently very expensive.
- It is no longer decentralized as it was meant to be.
- Generally, it’s still complex to understand; transactions are not that intuitive.
- Bitcoin is still innovative and disruptive to be accepted by governments
On October 31st, 2008 Satoshi Nakamoto published a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” Bitcoin.org.
No one knows who this person or a group of people are.
January 3rd, 2009 the bitcoin network was created and the first block was mined, aka “the genesis block”.
January 12th, 2009 the first 10 bitcoins were transferred from Satoshi Nakamoto to computer scientist named Hal Finney.
Bitcoin was first adopted by digital black markets and also continues these days.
2011-2012 – Excepted as a mean pf payment; Rising in worth.
2011 Bitcoin price started from $0.30 to as high as $31.8 in June this year. It fell back to $4-$5 levels by the end of the year.
2012 Transaction in Silk-Road were reaching the amount of 9.9 million in bitcoin worth about $214 million.
2013-2016 – High volatility in prices and first adoption for donation.
2013 Due to high demand price quotes rising from $13.30 to as high as $770 (January 1st, 2014).
March 2013, we encounter the first regulatory approach towards the digital currency.
FinCEN established regulatory guidelines for “decentralized virtual currencies”.
November 30th, 2013 price reached $1,163 before starting a long crash to $152 level in January 2015.
2014 Voltilty continue and going from a hight of $770 to $314 by the end of the year.
July 30th, 2014 was the date that Wiki Media Foundation accepted bitcoin for people to make their donations.
2015 We can see prices starting from $314 to $434.
2016 Prices reach $998 quote.
2017-2018 – The big jump, new ICOs, IPOs
2017 Starting from $998 to an all-time high on December 17th this year topping $19,783.
September 2017 – China bans trading in bitcoin;
2018 Another blow to the price, starting from $13,412.
2019 Until today – IEOs, Volatility, Regulations, and Uncertainty
2109 Interesting year where the crypto community grows; high hopes for new records, where the prices fall to the $3,000 range and then back up to $10,000 range.
During this year we encounter the birth on many new exchanges (IEOs), we found many more professional reads on cryptocurrencies, and note a stagnation in all altcoins prices.
Statistics say that about 2.9 to 5.8 million people are using cryptocurrency wallet and Bitcoin is the most used one among 700+ of them. It is the first digital currency that came into existence in 2009. Launched as open-source software by an anonymous person or a bunch of people under the name Satoshi Nakamoto. It is a worldwide system for virtual payments working peer-to-peer without the necessity of any intermediary. Transactions are checked out by network nodes and recorded in the blockchain, a public ledger.
What is blockchain? the technology Bitcoin is based on.
In a simple form think about it as a technology that can help you send information to another person, in a secure way.
This information can be a letter, a blog or a price quote like bitcoin.
In professional terms, it’s a decentralized, often public, digital ledger used for transferring information between computers. The built is cryptic. Every block connects to another block by Hash number; You cannot change one block retroactively.
In the bitcoin case, the information transferred between blocks is the price.
It is a continuously growing chain of records of transactions between two parties which is verifiable and cannot be manipulated in any way. To alter a single block, other subsequent blocks are also to be altered. Decentralization is another original virtue of the blockchain that has made it preferable for securing documents, public records, medical records, transaction processing, voting etc.
In order to make a transaction on a blockchain network, you need miners.
Since we don’t have a bank or a third party to take care of our transfer, we use cryptic formulas.
The miners are computers around the world that help solving this code and finally make a transaction.
Here is how it goes step by step:
Step 1: A user request to transfer bitcoin from his digital wallet.
Step 2: The wallet application broadcasts the request to the blockchain network (or to the open ledger if you like);
This transaction is waiting in a ‘pool’ of transactions and waits for a miner to pick it up.
Step 3: A miner picks up the request, and form it into a ‘block’.
A ‘block’ is a collection of information, similar in a sense to bank information on a transaction.
Adding a block on the blockchain is called a signature and it is basically a proof of concept that the miner can process it. It requires a lot of computation power as they need to solve mathematical problems.
Step 4: A miner that was first to get a signature, broadcasts the block to all other miners.
Step 5: All other miners in the network confirms that the block is eligible by hashing it. The blockchain network relies on consensus algorithm. This is why.
This action creates a chain of blocks that verifies the transaction.
Step 6: Your friend receives his bitcoin to his wallet.
A wallet, or a digital wallet, is an application that knows how to receive and send digital currency. If you want to keep your bitcoins somewhere you must have it.
Bitcoin ensures the privacy of the users, decentralization of authority and other enormous facilities. We predict that evolution is coming into economic system holding the hand of Bitcoin. The blockchain technology, along with coming regulations can create a new sustainable mean of payment.