Bitcoin is a digital currency protected by cryptography not controlled by any central authority. It was created in 2009 by an individual known under the pseudonym of Satoshi Nakamoto initially with the aim of creating an alternative means of payment to traditional currencies. do You
At the beginning of 2010, bitcoin was worth about $ 0.003, while at the end of 2017 it reached almost $ 20,000. At the end of 2017, in the wake of the success of bitcoin, hundreds of other cryptocurrencies appeared, each with its own characteristics. Only a few of these have reached high values, including ethereum and bitcoin cash, up to litecoin and stellar. Do you Know about Overclocking Video Cards?
Currency or raw material?
Bitcoin was born as an alternative payment method to traditional currencies and in fact it is sometimes used for this purpose. To date, the strong volatility that characterizes bitcoin does not make it suitable as a payment tool: sellers should continually review the prices of their assets, given the significant swings in value.
This is why bitcoin is bought for investment purposes, as is the case with gold and other precious metals. Like commodities, it is not directly influenced by a single economy, much less by the monetary policy decisions of central banks.
Remember that although bitcoin is not affected by the factors that affect traditional currencies, there are a number of elements that affect its value.
How does it work?
Bitcoin is based on two fundamental processes: the blockchain and the mining process. The blockchain is a kind of digital ledger shared among all users and composed of all the transactions that have taken place up to that moment.
These transactions are grouped into “blocks”, which are cryptographically protected and linked together. The blockchain is accessible to everyone at any time and can only be changed with the will and computing power of the majority of the network.
This means that it is almost impossible to change it retroactively and reduces the possibility of human error.
Mining is the process by which blocks are added to the blockchain, thus allowing the creation (or “mining” ) of new units of the cryptocurrency. These units are referred to as the ” block reward”, a sort of reward for helping to validate transactions.
In the case of bitcoin, the block prize is currently 12.5 bitcoin, a value that halves every four years or so. The role of the miner is to carry out this process by solving complex algorithms. The role of the miner is to carry out this process by solving complex algorithms.
By changing the complexity of the algorithms, miners can make the block processing time more or less uniform. Due to their pivotal role, miners exert significant control over bitcoin and the mining process has now become a business.
Once bitcoins are in circulation, they can be traded via an exchange or stored in a digital wallet. Remember that when you trade with IG, you never own the underlying, so you won’t need a wallet or an account on an exchange.
What is the fork?
A fork is a fork of the blockchain, which creates two new separate blockchains. It is up to the network of miners to agree which of these to continue to use and which to discard. Forks are the result of a misalignment of the mining programs used by miners and allow the blockchain to update itself. There are two types of forks: soft and hard.
Soft fork: Updated blockchain validates all transactions (blocks). However, the existing blockchain will continue to recognize and record these transactions. Remember that the updated blockchain does not recognize blocks extracted through programs that the existing blockchain uses.
Hard fork: The updated blockchain validates all transactions, but the existing blockchain no longer recognizes these blocks as valid, nor does it register them. This means that all users with outdated programs must update to access the new blockchain
How is bitcoin used?
As a means of payment Some companies already accept bitcoin as a means of payment, although they are still a minority.
These include:
- WordPress Subway
- Microsoft
- Virgin Galactic
- Wikipedia
Of course, these large companies already have the infrastructure to accept cryptocurrency. Given regulatory uncertainties and market volatility, it is not surprising that bitcoin is not yet universally accepted.
As a basis for technology
Many companies are studying the blockchain, the real engine of bitcoin. This technology has already seen the emergence of new business models, including those related to global payments, web development and data security.
Additionally, there are a number of funds that intend to invest in blockchain-based projects.