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Oct 26, 2018

What is Bitcoin Crypto-Currency And Its Future

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Buy Sell Bitcoin Cryptocurrency
An amazing and my all-time favorite topic - The Bitcoin, has drawn almost everyone’s attention when it was first introduced in 2009 by an unknown person using the alias Satoshi Nakamoto. No one knows who is Nakamoto and there are many rumors related
to that but the truth still lay hidden as to who really introduced this out-of-the-world concept.

What is Bitcoin?
Bitcoin is a form of electronic cash, also known as Cryptocurrency. It is the most expensive currency in the world today.
It is a decentralized digital currency without a Central bank or single administrator and can be sent from user-to-user on the Peer-to-Peer Bitcoin network without the need for intermediaries or third party. Money can be directly transferred from one Bitcoin Wallet to another and the transfer amount is just 1 Rs. 67 Paise or 1 n ½ cents.

There is no regulatory body to monitor or control the transfer of Bitcoin across the Internet.
Really !!!

But then how does the concept work?
The record of every transaction is kept in Blockchain and the people maintaining the record of transactions in the Blockchain are also given some Bitcoins(12.5 bitcoins for verifying one transaction) to do the same as every transaction is verified.
Bitcoin’s use is popularly growing in Remittances i.e. the NRI’s use Bitcoin to transfer money to their homes in India.

There are many disadvantages of using Bitcoins as well.
As it is an Encrypted currency, unauthorized people such as Drugs and Illegal Arms dealer as well as Criminals all around the world are using it uninterruptedly. There’s no organization deciding when to make more Bitcoins, figuring out how many to produce, keeping track of where they are and investigating fraud.

So, How does Bitcoin actually work?
Bitcoin isn’t actually a string of data that can be duplicated but it is an entry in a huge global Ledger called a Blockchain.
The Blockchain records every bit of transaction that has ever happened. But there’s no central body to keep track of a Blockchain but a group of people does so. In fact, anyone can become a Blockchain Volunteer and there are many people keeping track of every single transaction and maintaining their own ledger or bitcoin blockchain and hence the accuracy of transactions is maintained.

But what about Security?
Bitcoins are kept pretty safe, all thanks to Cryptography; the reason it is called Cryptocurrency.

Bitcoins are safe because of Keys - which are chunks of information used to make mathematical guarantees about messages.
When you create an account on the Bitcoin Network and obtain a Bitcoin Wallet, that account is actually linked to 2 unique keys - The Private key and The Public key.

And the use of these keys?
The Private Key takes the data and marks it which is also known as ‘Signing’ the data so that no one else can replicate it and other people can verify the Signature later on. Then this signed data is sent to the Bitcoin Network so that everyone can use it through the use of the sending user’s Public Key to verify the Signature.

This means that the Private key is used to generate a unique signature and the public key is used to verify the signature across the network.

Everyone keeping track of the blockchain on the network knows to add your transaction to their copy of the blockchain.
In other words, If the public key works, it's the proof that the message was signed by your private key and is something you wanted to send. This proof of identity cannot be replicated in any way.

But how two transactions are managed at the same time?
Like for example, you need to send bitcoins to two persons but you have enough bitcoins to send to only one but both persons are important so you process the request to send the money to both.
Now is it possible that even if you have 100$ and you needed to send the same 100$ to each person i.e. you need to spend 200$ in total, you can send it 2 times? Obviously not, because you only possess enough to send it 1 time.

But how all this is managed?
For this, there’s a check built in the Bitcoin system.
Both the Bitcoin Network and your wallet automatically check your previous transactions to make sure you have enough bitcoins to send. But there can be one more problem. As lots of people are keeping the copies at the same time, there can be the network
delays which mean you cannot get the transaction requests in the same order So everyone across the network will be having the copies of transactions in a different order.
So, how to verify the correct order then?
To add a block of transactions to the blockchain, every person maintaining the Ledger needs to solve a Math Problem or a Hash ProblemA hash function takes an input of any size and turns it in an output of fixed size.

The Hash function that Bitcoin uses is SHA256 which stands for Secure Hash Algorithm 256-bit. It is originally developed by the United States National Security Agency.

Computers used to solve the Hash Problems take 10 minutes to do so and that means they are making billions of calculations before coming to a conclusion. Whoever solves the Hash first in the Bitcoin network gets to add the block of transactions in the blockchain.

The volunteers spend thousands of dollars in maintaining such systems which solve Hash problems. But why do they do so?
It is because they are rewarded for doing so and Bitcoin actually has a built-in system to reward them.

Every time you win the race to add a Block to a Blockchain, 12.5 bitcoins are added to your account as a reward. These bitcoin volunteers which update the blockchain are known as Blockchain Miners. Every single Bitcoin that exists is created to award a Bitcoin Miner.

Miners are tipped a very small amount for each transaction they add to the ledger.

It is very important to note that for every 21,000 blocks, the number of coins generated when a new block is added goes down by half i.e. after 21,000 blocks are added to the blockchain, and when we add a new block the number of bitcoins are reduced to half to what it was in the starting.
So what started as a reward of 50 bitcoins, after 21,000 blocks are added; it decreased to 25 and again after 21,000 blocks are added; it decreased to 12.5 and in the coming years it will again decrease to half of this value.

That means bitcoins are decreasing at a fast rate and hence, their value in increasing day-by-day.

So, is investing in Bitcoin a good idea?
Try it yourself on your own risk and let us know if it is, as we can only provide you with the information and not the suggestion, you need to decide it yourself only.

If you wanted to Buy Bitcoin, Click Here.

That was all that we can help you with.
Happy Mining !!!