What is Bitcoin And How Does it Work?
A Bitcoin (BTC) is a digital coin (or token) — with nothing that is physically backing it, other than the electricity invested in mining it, — that is able to be transferred globally from a user to another user just like an email. One Bitcoin is divisible to 100,000,000 (100 million), that means one user can send to another 0.00000001 BTC. This is the smallest fraction of 1 BTC and is referred to as a Satoshi, after the anonymous creator of Bitcoin, Satoshi Nakamoto.
Currently, the average price of one BTC is $3,573, according to Blockchain.info, a knows data researching and blockchain news site.
Differently than other payment networks such as Mastercard, the BTC network isn’t controlled or owned by a single entity. The system is operated by a decentralized network of privately owned computers around the globe that keep a ledger of all the transactions that are being made on the Bitcoin Blockchain, similar to the way Steemit is maintained by a decentralized network of bloggers and photographers.
Blockchain is the ledger that holds all the record of transaction on the BTC network.
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Why is Bitcoin Being Used by Criminals?
Anyone can open a BTC wallet and in minutes being able to send and receive coins, with actual physical value, that is very appealing to any market including criminals. Especially because it doesn’t require giving your name or proving your identity. There is no central authority that could collect this information.
Can’t the Government Just Shut Down Bitcoin?
As mentioned above, the Bitcoin network is a decentralized system that uses many private computer around the world to maintain the network’s credibility and to confirm transactions – to grasp the volume, in 2018 there were ten’s of thousands of computers helping to maintain the network.
On the off chance that the goverment went ahead and made it illicit for Americans to partake in this system, the computers and individuals keeping the records in different nations globally would still have the capacity to proceed. The decentralized idea of Bitcoin is additionally one of the characteristics that have made it well known with individuals who are suspicious of government specialists.
Can I Give Myself More Bitcoin?
Anyone who is helping to maintain the network of BTC has an access to her or his copy of the records on the blockchain, their own ledger. If they try to change their copy it will be rejected because it is different from all other copies of other users’ ledgers. In order for the transaction to go through it has to be the same in all copies of all ledgers.
Is It Being Used Legally As Well?
Just a little level of all transactions on the Bitcoin blockchain are not for legal purposes. Most transactions are done by individuals purchasing and moving Bitcoins on trades, and on exchanges, trying to guess the price and make a profit. An entire universe of dealers and brokers has jumped up around Bitcoin.
Only a small percentage of all transactions on the Bitcoin network are explicitly illegal. Most transactions are people buying and selling Bitcoins on exchanges, speculating on future prices. A whole world of high-frequency traders has sprung up around Bitcoin.
Individuals in nations with high inflation, similar to Zimbabwe and Venezuela, have purchased Bitcoin with their cash to prevent from losing their investment funds due to their own national currency value going lower.
What is mining?
Mining Bitcoin is a procedure where computers are “racing” in a competition to guess a big random number, during that helping to maintain the network. Those computers are helping to maintain the network by computing transactions into the network and confirming them in a cryptic method. There can only be 1 winner in every block and the reward goes straight to that winner – today the reward is 12.5 BTC – the reward amount divides itself by two every 4 years.
There is a new block being created about each 10 minutes, meaning every 10 minutes someone is receiving 12.5 Bitcoin, this process will continue until there are exactly 21,000,000 (21 million) BTC in existence which will happen around the year 2130. Today there are about 17,000,000 (17 million) Bitcoin in existence.
Each BTC that exists today was made through this procedure and at was given as a reward to a computer that was helping to maintain the network. Anybody can set their PC to mine BTC, yet nowadays just individuals with specific equipment that has specific abilities to mine BTC, has the advantage.
Is There Competition for Bitcoin?
Many. Since the birth of the Bitcoin blockchain thousands of other cryptocurrencies has sprung to life. Some with an entirely different idea (such as EOS, Etherem, NEO etc..) and some with an effort to just be a better currency with better speed or better decentrallity (such as Litecoin, Monero etc..).
Some of the new coins appearing in the market are forks of Bitcoin, which is a process of making a clone of a blockchain (For example: Bitcoin Cash). Today BTC has the biggest market cap, and biggest number of users. With time improvements will be added to the BTC protocol and make it faster, more scalable with more features and security. The future is trustless, meaning all transactions will be secure algorithmically!
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