WHAT IS BITCOIN?

What is Bitcoin? Why is it often mentioned with such specific value? This article will help you understand more about Bitcoin and its real value. Don’t miss the opportunity to learn more with CoinStrategists right away!

BASIC CONCEPT OF BITCOIN

Bitcoin is the pioneering cryptocurrency worldwide, created on the Blockchain technology by an anonymous individual or group known as Satoshi Nakamoto. First introduced in 2009, Bitcoin paved the way for the development of today’s cryptocurrency market.

Bitcoin operates on a peer-to-peer network, allowing direct transactions between sender and receiver without intermediaries, eliminating unnecessary fees and reducing costs compared to international money transfer services. There is a total of 21 million BTC in the world, a number that cannot be changed, even by Satoshi Nakamoto, the founder.

OPERATION MECHANISM OF BITCOIN

Bitcoin relies on blockchain technology, a decentralized and public ledger system. Whenever a transaction is conducted, it is added to a block, and these blocks are linked together to form a blockchain. The Bitcoin network consists of thousands of nodes (computers) worldwide, tasked with confirming and recording transactions.

When a Bitcoin transaction is initiated, it is broadcast across the network and awaits confirmation from nodes in the system. These nodes verify the validity of the transaction, including verifying the origin of the Bitcoin and checking the digital signatures. Once confirmed, the transaction is bundled into a new block and added to the blockchain.

UNIQUE CHARACTERISTICS THAT ONLY BITCOIN CAN PROVIDE

What is Bitcoin? Unlike fiat currencies like USD, it stands out because it is tokenized and distinguished by the following outstanding features:

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DECENTRALIZED MECHANISM

Currently, banks possess nearly complete information about their customers including transactions, addresses, phone numbers, etc. In contrast, Bitcoin transactions are entirely anonymous. However, some individuals exploit these transactions for activities such as drug trafficking, terrorism, or money laundering.

LOW TRANSACTION FEES

Comparing the costs of international money transfers through organizations like banks, Bitcoin transaction fees are typically significantly lower. In practice, each bank has its fee structure, often charging a percentage of the amount you wish to send.

SECURITY MECHANISM

Bitcoin’s anonymity is relative because every BTC transaction is recorded in the blockchain. In theory, if your wallet address is made public, anyone can scrutinize your balance by carefully analyzing the blockchain ledger.

ADDITIONAL INFORMATION ABOUT BITCOIN THAT NOT EVERYONE KNOWS

What is Bitcoin? Here’s a few secrets that you wouldn’t know unless you researched thoroughly:

WHY DOES BITCOIN HAVE VALUE?

The value of Bitcoin has risen significantly recently, but this increase doesn’t entirely reflect its core value. Instead, it reflects market reactions according to supply and demand principles. Bitcoin derives its value primarily from its technology: peer-to-peer payments and the elimination of intermediaries in transactions. This explains why it continues to exist and be utilized.

TOTAL BITCOIN IN CIRCULATION?

Currently, a total of 21 million Bitcoins have been created, and this number cannot change, not even by Satoshi Nakamoto – the presumed founder of Bitcoin. In reality, only about 17 million Bitcoins have been mined, and the circulating supply is lower due to various reasons.

HOW BITCOIN IS CREATED

The process of creating Bitcoin is entirely automated through a computer network. This network operates based on the Proof-of-Work (PoW) mechanism, where participating computers (nodes) act as miners and help maintain the network. Currently, two popular methods of mining Bitcoin are through cloud mining and hardware mining.

CONCLUSION

The article above contains all the basic information you need to know about what is Bitcoin, a highly influential factor in the cryptocurrency market. Make sure to research thoroughly before getting involved to approach it confidently and effectively.