Bitcoin is a digital currency that was created in 2008 when a mysterious entity named Satoshi Nakamoto released a white paper stating about bitcoin that is an electronic cash system. Bitcoin was introduced in 2009 at the time of the financial crisis, and this impressed people across the world. It is a currency that is widely accepted in developing countries as it helps businesses to gain the advantage of accepting bitcoin. It is a bit challenging for beginners to understand digital currencies.
A digital currency means a method of payment that exists in electronic form. Digital currencies are intangible means that they don’t exist in physical form. The payment in digital currencies is transferred through computers. Users who want to transfer bitcoin into physical cash can do it from bitcoin exchanges or bitcoin ATMs. As of today, there are around 4000 cryptocurrencies that exist, but bitcoin is the most popular and widely accepted cryptocurrency. You can learn about latest technologies other than blockchain by visiting The News Spy.
Satoshi Nakamoto is the mastermind behind the idea of bitcoin currency, and the motive of Satoshi was to create a currency that is independent of government or financial institutions. The real identity of Satoshi is still unknown as, after one year of bitcoin, he suddenly got disappeared. And as of now, the bitcoin network is in the hands of its community members.
This is a special guide for novices that will explain about features of bitcoin. Let’s learn about features of bitcoin in this article, which are as follows:
Bitcoins are stored in digital wallets, and there are three main key points of digital wallets that include bitcoin address, the public key, and private key. The bitcoin address is basically a location where bitcoins are stored, and public and private keys are the encryption keys that protect the digital tokens.
The private key is a secret key that is in alphanumeric form and is used to protect digital tokens. It is imperative to secure a private key as a private key, once lost or theft, users can never recover their bitcoins again and will lose all their funds. The private key is more like a PIN code of bank account, and users can only access wallet if he/she has the private key.
The bitcoin transactions are recorded on a distributed public ledger that is known as the blockchain. A blockchain ledger is public, and therefore all the transactions recorded on it are accessible to the public. All users can view the bitcoin transactions. This clearly states that the blockchain ledger is transparent, but also no one can identify the identity of bitcoin transactions.
The best thing about both bitcoin and blockchain is that both are decentralized. Decentralized currency means no involvement of government or financial institutions, and therefore no involvement means no sharing of personal information. User anonymity is maintained as no users are required to share their personal details on bitcoin wallets. This is one of the important features as most users don’t want interference from the government. But due to the feature of anonymity, the trading of illegal weapons and illegal activities have been carried out.
The transactions carried out bitcoin network doesn’t charge the maker and taker charges from users, unlike traditional currencies. Miners do the work of verifying the transactions, and miners usually charge a small transaction fee to process the transactions on a priority basis. That transaction fee is less than the charges that usually financial institutions charge. Not only the bitcoin transactions are low cost, but also they are processed faster. As compared to traditional currencies, bitcoin payments can be made globally, and they take few hours to get completed.
Blockchain is the technology on which the entire bitcoin network is built-on or dependent. In simple terms, blockchain is also a distributed public ledger that records all bitcoin transactions. Blockchain is decentralized, and it uses cryptographic principles to secure the transactions and data of users. Blockchain is one of the main and best features of the bitcoin network, and miners do the work verifying the transactions and recording them on the blockchain ledger.