What is Bitcoin,why it needed?

15 OCTOBER · PUBLIC The use of the cryptocurrency ‘bitcoin’ is on the rise. On 15 August 2014, Bangladesh became the first country in Asia to become a member of the Bitcoin Foundation.

Dhaka: The use of cryptocurrency 'Bitcoin' is gradually increasing. On August 15, Bangladesh became the first country in Asia to become a member of the Bitcoin Foundation. But what is Bitcoin, for what? What work is needed? In search of answers to such various questions, banglanews has brought a series of reports on Bitcoin for its readers. The first episode is about the introduction of cryptocurrency 'Bitcoin'.

In real life and online transactions are usually dealt with seemingly without any problems, using conventional paper coins or related digitally signed objects. However, there are two major problems with the use of currently used ATM cards, credit cards, debit cards or other items with digital signatures.

In such transactions, both the customer and the recipient have to have 'trust' or confidence in a third party, for example a bank. The third party pays a certain amount of money to both the parties in this bank, which is called 'double spending' in English.

Origin of Bitcoin:

To solve the above problem, Satoshi Nakamoto, under the pseudonym, published a 9-page research proposal online in October 2006 entitled "Bitcoin: A Peer-to-Peer Electronic Cash System". Where the first idea about bitcoin is given.

The proposal summarizes the need for a peer-to-peer electronic currency payment system, which allows one to complete a transaction without having to go to another third party or organization. At the same time be able to refrain from ‘double spending’. In this system all types of transactions will be done on the basis of ‘proof of work (transaction)’ instead of trust and all types of transactions will be recorded in a specific network.

Satoshi has created the first software for bitcoin ‘mining’ since the proposal was published. ‘Mining’ is the method by which bitcoin is made. In January 2009, Satoshi released the first bitcoin currency.

The true identity of this Satoshi Nakamoto is still unknown.

What is Bitcoin?

So 'Bitcoin' - B in English, in capital letters - is a peer-to-peer network where it is possible to change ownership of the currency without a trusted third party, and the unit used in this network is 'bitcoin' - in English b, in small letters - which is cryptographic in a completely digital way. Is created using computer coding.

Features of Bitcoin

Made entirely digitally, it has virtually no physical existence. No central bank controls it. Its monetary system is ongoing as a result of its global use by individuals or entities. Due to the peer-to-peer system, direct transactions are done without any organization or middleman. Due to the use of cryptography, it is impossible to access Bitcoin without proper permission. After all, it is possible to trade in Bitcoin under a completely pseudonym.

The difference between conventional currency and bitcoin

Conventional coins used worldwide are mainly made of paper. Paper money is at the heart of any kind of service transaction. No matter which way the service is exchanged, face-to-face service delivery, online service delivery, exchange of services through banks or financial institutions, etc.

Bitcoin is a type of cryptocurrency created using cryptography. The main difference between conventional currency and cryptocurrency is that due to physical existence, conventional currency can be used hand-in-hand. Cryptocurrency on the other hand can only be used. Being virtual or digital it can only be used, never taken in hand.

How Bitcoin Works:

Being a peer-to-peer network, Bitcoin transactions are carried out from the wallet of the service provider and the recipient. Bitcoin is stored in the 'wallet'. It can be either online or offline. A bitcoin user has to use two keys. A ‘Public Key’, it is open to everyone. The other is the ‘private key’, which is always confidential and is used to secure transactions.

The history of the transaction is recorded in an open ledger (public ledger), called a 'block chain'. In this case ‘public key’ is used and the same transaction cannot be repeated by the same user. From the first transaction account in the blockchain to date, all accounts are preserved and are updated regularly.

Disadvantages of Bitcoin

According to information and technology expert author Ken Has, bitcoin has several disadvantages. Firstly, due to the inability to repeat the transaction, if the service recipient does not receive the relevant service, there is no way to get the money back. Second, if the Bitcoin ‘wallet’ is lost or damaged, it cannot be recovered. Which does not apply to the wallet or coin we use.

Third, Bitcoin is very volatile as a medium of exchange.

Fourth, although the use of Bitcoin is increasing, it is very limited compared to conventional currencies. So it has to be used by converting it into conventional currency. After all, Bitcoin has no credit system. While this is a good thing, the current world economy is credit dependent. We carry advance services based on credit.

Bitcoin rival

There are currently 454 types of cryptocurrencies being used around the world. However, Litecoin and Ripple are among them. Other cryptocurrencies are not as widely used as Bitcoin. Although Litecoin may seem like a rival to Bitcoin, its chances are slim.

World famous brands / companies who take bitcoin

The first product to be exchanged for Bitcoin in the real world was on May 21, 2010, when Bitcoin user Laszlo bought a pizza worth ২৫ 25 for 10,000 bitcoin coins.

Bitcoin is used by more than 30,000 merchants and charities worldwide. According to US stock market operator Nasdaq, US-based online retailer Overstock.com, UK-based world-renowned businessman Richard Bryanson-operated airline Virgin Galactic, popular free blogging platform Wordpress, popular mobile gaming company Zynga, international e-commerce website Payam Car makers Tesla Motors, online dating website OkCupid, and popular torrent site The Pirate Bay offer their services via Bitcoin.