Introduction to Bitcoin
Bitcoin is a digital currency that is often used in order to make digital transactions and payments. It is used by people all over the world and unlike the printed currency it is not in the form of coins or notes; rather Bitcoins are a growing number due to the increase in the use of computers and software.
A major distinguishing factor is that it is controlled by no single institution or network making it decentralized. This feature enables one to invest their money without it being in the custody of a single bank. Bitcoin was developed as an electronic payment method that was based on some algorithmic evidence. Bitcoins are not printed instead ‘mined’ by making use of an algorithm in a distributed network.
Characteristics of Bitcoins
Decentralized
No single authority controls the bitcoin network and bitcoins are not minted like ordinary coins instead mined. The machines work together to regulate the flow of money so even if a network loses connectivity the money keeps revolving.
Easy set up
Online accounts are cost and time efficient and do not seek legal or important documents. Unlike the traditional methods of opening a bank account where one needs money and time to invest, online accounts open up in seconds with nil investments and zero queries.
Flawless processing
The bitcoin network is completely transparent with details of every single transaction and credit being recorded in huge software known as blockchain. However, it can be made opaque by using different bitcoin addresses instead of identical ones and also by restricting large transfers of bitcoin to the same address.
Affordable
Traditional methods of transferring funds internationally charged money unlike which national and international transfers are free due to the use of bitcoin.
Fast
As soon as the bitcoin network processes a payment it will be made which may take a few minutes or seconds making it fast and flexible.
Bitcoin transactions
The transfer of a particular amount of money between bitcoin wallet users is known as a transaction. Private keys or seeds are data that are used by bitcoin wallets in order to sign transactions providing algorithmic evidence of it coming from the owner’s wallet. Another way of prevention of duplication of payments is by the use of a signature.
Mining Bitcoin
Transactions are televised among users and generally are confirmed by the network in the subsequent ten minutes via the process of mining. Mining is the process which includes the waiting transactions to the blockchain.
Blockchain
A block chain is made of blocks that are made to fit every kind of screening and security that it may have to go through. The security on the network prevents the intervention of a third party in a blockchain to disrupt the transactions in any previous blocks. By using these checks a blockchain ensures an end to end safety of payments and transactions.
