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Bitcoin (BTC)

by Crypto Soho December 31, 2017 0 comment
Bitcoin (BTC)
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Bitcoin Cryptocurrency Review

The Best Coin Ever

What is Bitcoin?

Bitcoin is a payment network that allows transferring money between to parties without the need of an intermediator, like a bank, and a new type of money.

History

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 an 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.

bitcoin

Blockchain

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.

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.

Transaction

Transaction through blockchain is more like inputs and outputs. Previously collected outputs from various sources that have not been spent yet are the Bitcoins which now can be used as inputs. An output contains the number of coins to be sent and the address of the recipient. Multiple inputs refer to multiple coins to be transacted whereas, multiple outputs indicate that there are multiple recipients in one transaction. The amount of input excluded from the transaction output is considered as transaction fee which is optional. It is up to the miners to execute transactions. Miners are interested in transactions that pay handsome fees which in turn depend on the number of inputs used in creating the transactions.

Mining

It is done by the people called miners. They serve keeping records of transactions using computers with a highly efficient processing unit. It is said earlier that a group of records formulates a block which is connected to the previous one by SHA-256 hashing algorithm finally forming the blockchain. Proof-of-work protocol allows a new block to be added to the network and makes its modification nearly impossible. To alter any records of a block, one will have to alter other blocks too.

Sometimes miners work combinedly to increase the processing power that makes mining easier and faster. It is called pooled mining. Each miner gets their fair share according to their contribution in finding the block.

Supply

Bitcoins are created when a miner successfully finds a block. That specific miner is awarded newly created bitcoins with the processed payment by a special transaction called a coinbase. Every bitcoin is created in this way.

In July 2016, 12.5 fresh bitcoins used to be added to the blockchain per block. The Bitcoin Protocol states that amount of creation of new bitcoins will be halved every 210,000 blocks that approximately takes four years. To maintain artificial scarcity, the founder Nakamoto declared that there would be 21 million bitcoins ever in total. There are predictions that this total hard cap will be circulated in the blockchain within the year 2040.

Wallet

As bitcoin is a digital form of money, bitcoin wallet can be termed as something that stores the digital credentials for users’ bitcoin holdings and that allows them to transact bitcoins. Users are provided a set of cryptographic keys, one public and one private, which are very much necessary to conduct transactions. Users may have the wallet in the form of a smart software application or hardware wallet.

In Short

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.

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