What is Bitcoin (from A to Z)-WWNEED.COM
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The wealth of the invention of blockchain technology or what is called the distributed ledger has contributed to the emergence of a new form of money that human society can rely on to meet its daily needs for payment and receipt. This form of money is called digital currencies, and unlike traditional currencies, it exists only in an encrypted virtual digital form and is not subject to any central authority. Bitcoin is the first cryptocurrency ever created with blockchain technology.
What is Bitcoin and how does it work?
Bitcoin was launched in 2009.
Bitcoin is the largest digital currency in the world by market capitalization.
Bitcoin’s price performance history has been turbulent; Where prices go through successive cycles of boom and bust.
The first cryptocurrency to achieve widespread success and popularity, it opened the way for thousands of other cryptocurrencies.
Bitcoin is created, stored, and traded using a decentralized distributed ledger system, known as the blockchain.
What is bitcoin?
The answer to the question of what is Bitcoin is that it is a decentralized digital currency that was created in January of 2009. It follows the ideas laid out in a white paper put out by the mysterious and pseudonymous Satoshi Nakamoto. Bitcoin promises lower transaction fees than other traditional online payment mechanisms, and unlike government-issued currencies, the Bitcoin system is not run by any decentralized authority.
Bitcoin is known as a type of cryptocurrency because it uses cryptography to maintain its security. There are no physical bitcoins, just balances kept in a public ledger to which everyone has transparent access (although every record is encrypted). All Bitcoin transactions are verified by an enormous amount of computing power via a process known as “mining”. Bitcoin is not issued or backed by any banks or governments, nor is an individual Bitcoin currency valuable as a commodity. Although it is not considered legal tender in most parts of the world, it is very popular and has led to the launch of hundreds of other cryptocurrencies, collectively referred to as altcoins or altcoins. Bitcoin is usually abbreviated to BTC when it is traded.
Understand what Bitcoin is
A bitcoin system is a collection of computers also referred to as “nodes” or “miners”, that all run bitcoins and store their own blockchains. Figuratively speaking, a blockchain can be thought of as a collection of blocks. In each block there is a set of transactions. Since all the computers running the blockchain have the same list of blocks and transactions and can see these new blocks transparently as they are filled with new bitcoin transactions, no one can cheat the system.
Anyone, whether they run a Bitcoin “node” or not, can see these transactions happen in real time. To attack the Bitcoin network, the bad actor would need to run at least 51% of the computing power that makes up Bitcoin. Bitcoin now has about 13,768 full nodes, as of mid-November 2021, and this number is increasing, making it more difficult for an attack to occur.
But if an attack does happen, the bitcoin miners – the people who participate in the Bitcoin network with their computers – could potentially fork into a new blockchain making the effort of the bad actor to achieve the attack a waste of time.
Bitcoin token balances are held using public and private “keys,” which are long strings of numbers and letters linked through a mathematical encryption algorithm that generates them. The public key (comparable to a bank account number) serves as the published address to the world to which others may send Bitcoin.
The private key (comparable to an ATM PIN) is meant to be a guarded secret and is only used to authorize bitcoin transfers. Bitcoin keys should not be confused with a Bitcoin wallet, which is a physical or digital device that facilitates the trading of Bitcoin and allows users to track ownership of coins. The term “wallet” is a bit misleading because the decentralized nature of Bitcoin means that it is not stored “in” a wallet, but rather distributed over blockchain systems.
Peer-to-peer technology
Bitcoin was one of the first digital currencies to use peer-to-peer (P2P) technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in Bitcoin mining are responsible for processing transactions on the Bitcoin blockchain and are incentivized with rewards (the issuance of new Bitcoins to them) and transaction fees paid in Bitcoin.
These miners can be seen as the decentralized authority that enforces the credibility of the Bitcoin network. New bitcoins are issued to miners at a steady rate, but it decreases periodically. There are only 21 million bitcoins that can be mined in total. As of November 2021, there are over 18.875 million bitcoins in existence and less than 2.125 million bitcoins left to mine.
In this way, Bitcoin and other cryptocurrencies operate differently from fiat currencies. In central banking systems, currency is created at a rate proportional to the growth of the economy and this system aims to maintain price stability. On the other hand, a decentralized system, such as Bitcoin, predetermines the issuance rate according to a specific algorithm.
What is the Bitcoin mining process?
Bitcoin mining is the process by which bitcoins are put into circulation. In general, mining requires solving computationally difficult puzzles to discover a new block, which is added to the blockchain.
Bitcoin mining adds and verifies transaction records across the network. Miners are rewarded with some bitcoins; The reward is halved every 210,000 blocks. The block reward was 50 new bitcoins in 2009. On May 11, 2020, the third halving took place bringing the reward down to 6.25 bitcoins.
A variety of devices can be used to mine bitcoins. However, some of them yield higher rewards than others. Certain computer chips, called application-specific integrated circuits (ASICs), and more advanced processing units such as graphics processing units (GPUs), can bring more bonuses. These elaborate mining processors are known as “mining rigs”.
A single bitcoin can be divided into eight decimal places (100 millionths of one bitcoin), and this smaller unit is referred to as a satoshi. If necessary, and if the participating miners accept the change, bitcoin could eventually be made divisible into more decimal places.
The early beginnings of bitcoin
August 18, 2008: The domain name Bitcoin.org was registered. 7. On this day, the domain name was WhoisGuard protected, which means that the identity of the person who registered it is not public information.
October 31, 2008: A person or group of people using the pseudonym Satoshi Nakamoto announces the Cryptography Mailing List on metzdowd.com: “I have been working on a new electronic cash system that is completely peer-to-peer, without the need for any trusted third party to be present. with it.” This now-famous white paper published on Bitcoin.org, titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” would become a charter for how Bitcoin works today.
January 3, 2009: The first Bitcoin block is mined. This is also known as the “Genesis Block” and had the text: “Chancellor Times 03/Jan/2009 on the brink of second bailout of banks”, possibly as evidence that the block was mined on or after that date, and possibly also as relevant political commentary
January 8, 2009: The first version of the Bitcoin software is announced in the crypto mailing list.
January 9, 2009: The first blockchain unit is created, and Bitcoin mining begins in earnest.
Who is the inventor of Bitcoin?
Satoshi Nakamoto is the name associated with the person or group of people who released the Bitcoin (white paper) project in 2008, and worked on developing the original Bitcoin software released in 2009. The true identity of Satoshi Nakamoto remains a mystery to this day. I mean, no one knows who invented Bitcoin, or at least not definitively.
Although it is tempting to believe that the media is all about Satoshi Nakamoto being a lonely, fictional genius who created Bitcoin out of thin air, such innovations don’t usually happen out of thin air. All great scientific discoveries, no matter how original they seem, are built on pre-existing research.
There are a few possible motives that might push the inventor of Bitcoin to keep his identity a secret. One of them is privacy: as Bitcoin gains so much popularity, it is likely that Satoshi Nakamoto will get a lot of attention from the media and governments. Another reason could be the potential for Bitcoin to cause significant disruption to the existing banking and monetary systems. If Bitcoin gains mass adoption, the system could overtake countries’ sovereign fiat currencies. This threat to the existing currency could prompt governments to take legal action against the creator of Bitcoin.
The other reason is security. Looking at 2009 alone, 32,490 blocks were mined at a reward rate of 50 BTC per block, the total payout in 2009 was 1,624,500 BTC. One can conclude that only Satoshi and possibly a few other people were mining during 2009 and they own the majority of this bitcoin supply.
Anyone who owns that much Bitcoin could become a target for criminals, especially given that bitcoin is less like a stock and more like cash, since the private keys needed to allow spending can be printed and kept.
What are Bitcoin halvings?
In the years since the launch of Bitcoin, there have been many instances where disagreements between factions of miners and developers have led to widespread divisions in the cryptocurrency community. In some of these cases, groups of Bitcoin users and miners have changed the protocol of the Bitcoin network itself.
This process is known as “forking,” or splitting, and it usually results in the creation of a new type of bitcoin with a new name. This fork can be a “hard fork”, where a new coin shares its transaction history with Bitcoin until a crucial fork point, at which point a new token is generated. Examples of cryptocurrencies created as a result of the hard fork include Bitcoin Cash (created August 2017), Bitcoin Gold (created October 2017), and Bitcoin SV (created November 2018).
The “soft split” is a change in protocol that remains consistent with the previous rules of the system. For example, Bitcoin soft forks have added functionality such as segregated witness (SegWit) to the system.
The price of Bitcoin has skyrocketed in just over a decade, from less than $1 in 2011 to over $68,000 as of November 2021. Bitcoin derives its value from several sources including its relative scarcity, market demand, and marginal cost. for production. Thus, despite being intangible, Bitcoin has a high value, with a total market capitalization of $1.11 trillion as of November 2021.
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