Bitcoin

BITCOIN

What is a Bitcoin?

Bitcoin is a Blockchain application.

Bitcoin is a peer to peer systems digital currency.

Bitcoin is a cryptocurrency.

It is a worldwide cryptocurrency and digital payment system called the first decentralized digital currency, as the system works without a central repository or single administrator.

Bitcoin is the biggest and most popular Block Chain Application in the world today

Who created the Bitcoin?

It was invented by an unknown person or group of people under the name "Satoshi Nakamoto" in Japan and released as open-source software in 2009.

The system is peer-to-peer, and transactions take place between users directly, without an intermediary like Banks, Governments or any private Companies . These transactions are verified by network nodes and recorded in a public distributed ledger called a Blockchain.

Why Bitcoin?

Bitcoin is a digital currency used to transfer money from one person to another person whether you know about that persons identity, address or location or not.

Unlike traditional banking money transfer where the parties are to required to be registered with  Banks by providing person's address, identity and government ID proof. Bitcoin transactions are totally anonymous with no identity leakage of a person or a details of any transactions.

credit cards, online bank transactions have middle man that is Banks which actually asks you for your identity proof and you house address. bitcoin transaction is totally anonymous not overseen by any banks or authority who will track your transaction and identity.

Bitcoin Transaction, How does it work?

Person "A" wants to transfer money to Person "B", say the transfer amount to be 10,000 Rs.

Person "A" buys 10,000 Rs worth of Bitcoin's from a local Bitcoin Exchange service, now the Person "A" transfers the bitcoin that he purchased from the exchange to the Person "B" bitcoin address. 

Person "B" receives the Bitcoin's sent by Person "A", now Person "B" will convert those Bitcoins back into money from a local bitcoin exchange. local bitcoin exchange service may charge money for the service, the advantage here is that transaction of the money in totally anonymous, no government,bank or any private company can track the user's identity, address, location or the amount of money transferred. 

the bitcoin transaction is approved by block chain users (millions of user computers in the system) for which users makes a small fraction of money for approving and overseeing the transaction.

Block chain users verifies the transaction and makes sure that the only person who is intended to get the money gets the money and not anyone else by mistake.

Bitcoins can be traded for goods or services with vendors who accept Bitcoins as payment.

Bitcoin as an Investment?

Though the bitcoins were meant for money transfer and trading, it has become more of an money investment in recent times, reason being that the number of bitcoins being introduced to the block chain systems are limited.

currently 2.5 bitcoins per block are introduced (approximately every ten minutes) until mid 2020, and then afterwards 6.25 bitcoins per block for 4 years until next halving. This halving continues until 2110–40, when 21 million bitcoins will have been issued.

as more numbers of users buy bitcoins over the time the price of bitcoin purchasing power have greatly reduced over the time, thus prices of bitcoins are sky rocketing.

Just look at Price of 1 Bitcoin in over 5 years below

The Price of 1 Bitcoin on Nov 2013 was near about $979 and in the Oct 2017 the price of the 1 Bitcoin sky rocketed to $6924.  500% rise in the value.

if a Person bought a Bitcoin in Dec 2013 by paying $979 at a local exchange with an intention to transfer money to some one but later decides not to transfer it for some reason and keeps the Bitcoin with himself to use it some time later, if the person hasn't sent those bitcoins to anyone over the time and still owns those bitcoins with him , if he decides to exchange those bitcoins for money in Oct 2017 from a local bitcoin exchange service,  he will be getting $6924 in money since the price of the bitcoin increased up by 500%  from 2013 to 2017.

due to the increasing price of a bitcoin, users are now seeing it as more of an investment of money just like stock market investment and Gold trade.

so the person who originally bought 1 bitcoin for $979 but after 5 years his bitcoin's worth is about $6924. so the person now earns $6924 by investing only $979 5 years earlier, just like gold prices, where the worth of the gold prices increases over the time as there will be limited supply of gold material meanwhile more users try buying it. 

Bitcoin Hackers

The rise in the value of Bitcoin prices and its digital nature have made Bitcoins vulnerable to the hackers.

a Hacker usually tries hacking the bitcoin exchange service, e-wallet of a person who stores bitcoins after purchasing it from an exchange, or a repository medium where a person or a company stores bitcoins for trading, hackers goal is to steal bitcoins from these places and sell those bitcoins for money across from an another local bitcoin exchange service making profits.