Bitcoin, the No. 1 market capitalization, is a decentralized cryptocurrency based on cryptography and blockchain technology.
Birth of Bitcoin:
In 2008, the global economic crisis was caused by the subprime financial crisis in the United States. In this crisis, poor credit management can lead to financial problems. Many government financial aid programs have been used for financial security. This was also indicative of the uncertainty in the financial sector. This lack of trust requires a central organization for all employees to function effectively. However, given these assurances, the illegality still exists and the central agencies will not operate.
On November 1, 2008, Satoshi Nakamoto released the free Bitcoin form "Bitcoin: A P2P Electronic Money". In this free article, we explained how Bitcoin works. Based on blockchain and encryption technology, Bitcoin is a decentralized payment, which is a solution to skepticism. Here, all data exchanges have been recorded by the peer-to-peer network as proof of operation. Accordingly, Bitcoin can be traded without a third party.
On January 3, 2009, Satoshi Nakamoto, who heralded the birth of Bitcoin, mined a Genesis block containing 50 Bitcoins.
On January 12, 2009, Hal Finney received his first bitcoin exchange, 10 bitcoins, from Satoshi Nakamoto.
How Bitcoin works:
To build merchant confidence, all Bitcoin transactions can be closed through nodes in the blockchain network to prevent mutual interest. However, data transfer may be different if all nodes need data due to network latency. Therefore, the data can be modified by the nodes.
To solve the problem mentioned above, Bitcoin uses a proof of functionality, an agreement that each competitor between them to solve arithmetic problems in order to find the correct hash. . A button with the correct hash can bundle changes into a new block and expand that block for each block. The receiving node synchronizes the blocks on the same data exchange. This process is called mining and nodes are involved in a process called miners. After mining a new block, miners can earn block rewards, starting from 50 bitcoins and exchange rates. Incentivized as a reward, miners will be actively involved in mining and validating data exchanges.
Blocking giveaways is the only way to advertise Bitcoin. In other words, Bitcoin is created by mining. However, there is a limit to the value of bitcoin as the total value of bitcoin is 21 million and it is expected to be mined by 2140. According to bitcoin's algorithm, half block reward is 210,000 blocks (up to 4 years); Half of the bitcoins are created in each block. By doing so, Bitcoin does not suffer from high inflation and retains its value.
Connecting Bitcoin and Blockchain Technology Bitcoin and blockchain technology are interconnected because the working mechanism of Bitcoin is technology-based. Bitcoin is an asset, and blockchain technology is the foundation of the technology that allows it to operate effectively. Their connection is very similar to the relationship between the photographer and his players. Player skills are prerequisites for video games.
3 characteristics of Bitcoin:
Traditionally, in business, money is provided by government agencies. For merchants, personal information, exchange information and other information is stored and managed in bank or third party records. These schools have proven capable of providing credit to customers and resolving fraudulent issues. Therefore, the parties enter into exchanges with these organizations as agreed. The parties only have access to their personal information. It is centralization.
However, since bitcoin is an asset, organizations are not allowed to publish bitcoin or data and control user data. According to the data distribution, the Bitcoin network allows all transactions to be publicly closed and synchronized on the blockchain. Thus, your exchange information is accessible to everyone. Meanwhile, according to the special data and proof of agreement algorithm, the data exchange of the block is irreversible. As a result, decentralization can gain public trust, eliminating the need for third-party intervention.
2. In the pseudonymous bitcoin network, you can identify your personal information and protect your assets from encryption. The private key allows you to trade bitcoins to your address without uploading any personal information. All exchanges are pseudonym based, which means that the identity of the two traders is not shared between them as only the bitcoin value and address are advertised. Also, compared to fiat currency, Bitcoin can be traded anywhere, anytime.
3. Financial Users Users can manage their bitcoins with their own key, and the key can be stored in a separate location. So no one can pay the bill. The confidentiality of personal information allows users to control their assets. In conclusion, the birth of Bitcoin is necessary, changing the culture of the industry and proving the widespread use of blockchain technology. Another cryptocurrency inspired by Bitcoin has emerged, creating a new market.