Bitcoin (BTC) is a digital currency that is used electronically, and distributed.
Bitcoin is a peer-to – peer decentralised network. No single entity or individual is controlling that.
Bitcoins cannot be printed and there is a very small number of them – only 21 mln bitcoins can ever be made.
Who created Bitcoin?
Bitcoin was first released in 2009 under the pseudonym Satoshi Nakamoto as open-source software by an anonymous programmer, or community of programmers. There have been a lot of rumours about the real identity of the founder of BTC, but Nakamoto has been publicly refuted by all the people listed in those rumors.
Nakamoto himself once claimed to be a male living in Japan who is 37 years old. But there are fair questions about this because of his poor English and his program not being named in Japanese. Nakamoto moved on to other issues around mid-2010 leaving Bitcoin in the hands of a few influential members of the BTC group. Satoshi also called the lead developer Gavin Andresen.
Nakamoto has been estimated to own about one mln Bitcoins, which as of September 2017 amounts to about $3.6 bln.
Who controls Bitcoin?
According to Gavin Andresen, the very first thing he focused on after Nakamoto moved on from the project was decentralisation. Andersen wanted Bitcoin to continue its existence autonomously, even if he would ‘get hit by a bus’.
For many people, Bitcoin’s principal advantage is its independence from world government, banks, and corporations. Not one authority may intervene in transactions with BTC, enforce transaction fees, or take away money from citizens. In fact, the Bitcoin movement is a highly transparent-each transaction that is stored in a massively distributed public ledger called the Blockchain.
Essentially, while Bitcoin isn’t controlled as a network, it gives total control over its finances to its users.
How does Bitcoin work?
A user just sees quantity of Bitcoins on their wallet and transaction details.
The Bitcoin network maintains a public ledger, dubbed the “block chain” behind the scenes. This ledger includes every transaction which has ever been handled. Digital transaction documents are grouped into ‘blocks’
When anyone tries to change only one letter or number in a transaction row, this will also affect any of the following blocks. The mistake or attempted theft can be quickly detected and corrected by anybody because it’s a public ledger.
The User wallet will check each transaction’s validity. That transaction’s authenticity is secured by digital signatures which correspond to the sending addresses.
Due to the verification process, and depending on the trading platform, a BTC transaction may take a few minutes to complete. The Bitcoin protocol is built to take about 10 minutes for any block to be mine.
Characteristics of Bitcoin
Decentralised
One of the key goals of Satoshi Nakamoto when developing Bitcoin was the freedom of the network from any governing authorities. It is designed so that every person, business, and every machine involved in the verification of mining and transactions become part of a vast network. Moreover, even if some portion of the network goes down, the money will continue to move.
Anonymous
Banks know almost all about their customers these days: credit history, addresses, phone numbers, spending patterns, and so on. With Bitcoin, it’s all really different, because the wallet doesn’t have to be connected to any personal identifying details. And while some people clearly don’t want their finances to be regulated and monitored by some kind of authority, others may argue in this relative anonymity that drug trafficking, terrorism, and other illicit and dangerous activities would flourish.
Transparent
Bitcoin’s anonymity is only relative since every single BTC transaction ever occurring is stored in the Blockchain. In theory, by carefully studying the blockchain ledger, if your wallet address was used publicly, anyone can tell how much money there is in it. Nonetheless, it is still almost impossible to trace a particular Bitcoin address to an individual.
Those who want to remain anonymous with their transactions should take steps to keep themselves under the radar. There are some types of wallets that emphasize anonymity and protection, but using multiple addresses and not moving large amounts of money into a single wallet will be the simplest step.
Fast
The Bitcoin network accepts payments almost immediately; it usually takes only a few minutes to obtain the money from someone on the other side of the planet, whereas regular bank transfers can take several days.
Non-repudiable
If you give your Bitcoins to someone, there’s no way to get them back, unless the receiver decides to return them to you. It guarantees a payment is made, ensuring that someone with whom you sell can’t cheat you by saying they’ve never got the money.
