Many will have heard the word bitcoin. Many economists are calling Bitcoin the money of the future. But what is this bitcoin? Let's find out.
Bitcoin is a cryptocurrency traded through open source cryptographic protocols.
Bitcoin transactions do not require any type of financial institution, regulatory body or clearing house.
Satoshi Nakamoto introduced the currency in 2006.
He called this monetary system peer-to-peer transactions.
Bitcoin transactions are protected by a server called Bitcoin Miner.
When Bitcoin is transacted between multiple computers or smartphones connected to a peer-to-peer communication system, its central server updates the user's laser.
New bitcoins are generated as soon as a transaction is completed.
By 2140, the newly created bitcoins will be halved every four consecutive years. After 2140, when 21 million bitcoins are created, no new bitcoins will be created. Since no financial institution is required to complete the transaction of Bitcoin and its transaction dynamics cannot be followed in any way.
So bitcoin is becoming popular day by day in different parts of the world.
In addition to legal goods transactions, the use of Bitcoin in drug smuggling and money laundering has also increased alarmingly.
Although Bitcoin has gained popularity as a digital currency, it has been criticized by many for its sharp fluctuations against various international currencies, its scarcity, and its limited use in business. B
itcoin's first ATM machine was launched in Vancouver, Canada last year.
The idea is that it will take Bitcoin further to establish itself as a currency.
The US and Canadian governments are considering registering Bitcoin customers to curb drug, smuggling, illegal arms trade and other illegal uses.
How does Bitcoin work? Bitcoin transactions are either peer-to-peer or from customer to customer's computer. It does not pass through a central clearing house or has a regulatory body to control it.
All Bitcoin processing is done online through an open source software. Anyone can generate bitcoin through Bitcoin Miner.
The process of generating bitcoin is always predictable and limited.
As soon as Bitcoin is generated, it is stored in the customer's digital wallet. If the stored bitcoin is sent by the customer to someone else's account, a unique electronic signature is created for the transaction, which is monitored by other miners and stored confidentially but securely within the network.
At the same time the current ledger of the customers is updated in the central database.
When a product is purchased with Bitcoin, it is sent to the seller's account and the seller can later repurchase the product with that Bitcoin, on the other hand an equal amount of Bitcoin is deducted from the buyer's ledger.
The total number of bitcoins is redefined every four years to keep up with the real currency.
Very informative article. Thank you.