All information about the cryptocurrency Bitcoin

Information about the cryptocurrency Bitcoin has long been in the minds of many people on the planet. There is a lot of different information in print, on television, and on the Internet. Therefore, more and more entrepreneurs are eager to familiarize themselves with this term. That’s why our team decided to make a detailed review of these electronic coins, which will help you understand what it is and why you need it.

Basic information

Bitcoin, also known as BTC, is an electronic payment system. It exchanges virtual currency. It operates similarly to the well-known Visa or MasterCard cards with the only difference: payments are not made in the usual euros or dollars. It should also be understood that bitcoin is not pegged to the currencies of countries or the World Bank. In other words, its value is formed based on demand. The main features of the cryptocurrency are:

1. Decentralized system. In other words, the currency is not regulated by financial institutions or government agencies. Bitcoin has no set limits on transactions and other operations.
2. Anonymity. When money is transferred, a special wallet number is used, which consists of a different number of characters. Thus, it is impossible to trace the name and surname of the owner.
3. Irreversibility of consequences. All operations with cryptocurrencies cannot be canceled. Even if the funds are transferred to the wrong user, it is impossible to return the funds. In fact, it is possible to reset the system, but it is extremely difficult to do so.
4. Security. The wallet for storing virtual money is designed in such a way that it cannot be hacked. Information is stored in a separate file that only the owner has. Even at the moment of performing any actions, it is impossible to “intercept” the transaction, which often happens in the banking sector.
5. Direct transactions. This means that only two people are involved in the process of exchanging finances. There are no intermediaries, which improves overall security.

History of cryptocurrency formation

There is no exact historical information about the formation of Bitcoin. Programmers and mathematicians worked on the process of its creation, aiming to create a decentralized system. At the same time, any actions in it are carried out exclusively on the basis of mathematical operations. After collecting the necessary amount of data, in 2008, Satoshi Nakamoto and his colleague Hal Finney first announced the creation of Bitcoin to the world. The first member of the duo became the most famous. The smallest fraction equal to 0.000.000.000.01 BTC was named in his honor. The project aims to maintain the security of personal information, decentralization, accessibility, and complete anonymity. In 2013, Sergey Mavrodi managed to provide a more detailed description. He described the cryptocurrency as “a breath of fresh air”. After all, financial transactions were monitored continuously, and bitcoin provided complete anonymity.

The function of an electronic coin

The functioning of BTC is based on the blockchain. This means that all transactions create a continuous block. It is closed only after one of the users selects the required electronic signature. Only after this process is a new block formed. Simply put, it’s like a book. Its chapters consist of transactions. In this case, to enter a new operation, you need to turn over all the previous pages of this book. Accordingly, a new section can be started only after the previous one is completed. Based on this, the blockchain is nothing more than a database. It stores encrypted information about all transactions. The key feature of bitcoin is precisely the blockchain. It is thanks to it and its potential that the currency forms a rate before other rates. Therefore, there are differences between virtual Bitcoin and standard Bitcoin and money, namely:

1. Form. Cryptocurrency has no material form, remaining virtual. In other words, bitcoin is a set of numbers generated by a special algorithm. Therefore, it differs from a paper banknote or coin.
2. Cost. The price of a standard currency depends on various geopolitical and economic factors of the country where it is issued. Bitcoin does not have such a link, being determined solely by demand.
3. Issue. Conventional money has no issue limit. You can create as much of it as you want. And BTC will reach its limit of 21,000,000 in the middle of the 22nd century.
4. Direct transfers. While fiat currency can be processed only in the presence of a third party, all Bitcoin transfers are made without such intermediation.

In fact, it is difficult to understand the functions of cryptocurrencies. Their positive aspects and negative ones are closely intertwined and cannot be interpreted unambiguously. For example, the irreversibility of a transaction means that the funds are guaranteed to be transferred to another person. But this situation can be used by other people – fraudsters and black market participants. One of the positive aspects is undoubtedly the possibility of independent bitcoin mining. And one of the negative ones is fraud and a constantly changing exchange rate.

How to get virtual coins?

Like any cryptocurrency, BTC can be obtained only by using the power of your own personal computer. In this process, a special place is given to the processor and video card. This mining system is called mining. Back in 2010, it was enough to use a single set of tools. But the changed situation has now made bitcoins hard to come by. To earn them, “farms” are used. This is a set of several powerful video cards installed in one system. The cost of such equipment can reach thousands of dollars. After all, a cascade of dozens, and sometimes hundreds of video cards is needed to make quick money. This situation has made cryptocurrency mining almost impossible for a beginner. However, there are other ways to get bitcoin:

1. Use exchange offices on the Internet.
2. Earn money on a cryptocurrency exchange.
3. Participate in special “taps”.
4. Make a purchase on trading exchanges.
5. Use self-service terminals.

These methods are useful both for people who are new to earning bitcoins and for those in whose countries mining is simply prohibited by government decrees.

How to use the earned BTC?

To fully utilize the accumulated cryptocurrency, you will need a virtual wallet. Each owner of such a tool receives a special key. It is used to conduct transactions. It cannot be used directly. Whenever you need to perform any operation, a pre-conceived password is used. To start using bitcoin, it is enough to set up such a wallet and top it up. Users receive detailed instructions during registration.

What can I spend bitcoin for?

Like any other payment system, bitcoin is used to pay for goods or services. The very first transaction was made for 10,000 BTC when its rate was equal to $30. Two forum participants agreed to buy two pizzas. Many years have passed since 2010, and bitcoin turnover has only increased. In the summer of 2017, Japan decided to accept this cryptocurrency as payment for about 260,000 retail outlets. Since then, there has been news every day that some company is starting to accept Bitcoin as payment. Today, literally everything can be purchased with bitcoin – food, airline tickets, real estate, etc. In the US government, some Republican senators can donate their BTC for development. One of the largest space tourism companies also accepts payments in cryptocurrency. Given the popularity of virtual coins, cards that can be used for payments may soon be issued. To conduct a transaction, you only need access to a smartphone and scan a QR code.

In conclusion.

As with any constantly evolving and unstable phenomenon in this world, it is impossible to know everything about Bitcoin. Although the key concepts and points have been covered, there is no guarantee that they will not change in the future. However, this information should be enough as a first introduction.