Digital Cryptocurrency: Bitcoin
Bitcoin is the most popular and the first technology to succeed as a cryptocurrency. It is a decentralized digital currency. It means without a central bank or third party administrator it can be sent from user to user on the peer-to-peer bitcoin network. The term “Bitcoin” refers to the protocol governing this currency. Second, bitcoin lowercase refers to the actual units of currency.
Satoshi Nakamoto published Bitcoin whitepaper in October 2008 and started in 2009. Satoshi Nakamoto is a pseudonym, or a false identity, of an individual or group. No one knows their real identity.
TRANSACTION PROCESS IN BITCOIN
In Bitcoin transactions, there is no need to use one’s real identity. Identity and account management are completely autonomous. They are represented by addresses, strings of random letters, and numbers. Anyone with a computer and internet connection can join the Bitcoin network. Each computer is a node in the Bitcoin network. Bitcoin is controlled by all Bitcoin users around the world. Even in a decentralized system, every Bitcoin user has a record of all transactions by using blockchain technology. In Bitcoin, the minting and distribution of bitcoins is determined through mining; since anyone can mine and win bitcoins, this process also aims to be decentralized.
Bitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. After the creation of Bitcoin, the number of digital wallets has been growing. And now there are around 50 million digital wallets users. Bitcoin protocol gives users a way to create and manage their own identities and record account balances at each transaction. In Bitcoin, it is difficult to ensure every Bitcoin node holds a consistent version of the transaction history and to identify malicious actors. The most popular attack is known as the double spending attack, an attack where some value is used for more than it‘s worth.
PRIVACY ISSUES WITH BITCOIN
There are no central parties to ask for information about user accounts, and there are no central parties to kick out or censor malicious users. Decentralized networks generally suffer from these problems, leading to inconsistencies between parties and malicious messages infecting the network. So no one is responsible if someone hacked your Bitcoin.
Bitcoin ensures a high degree of privacy and trust. It solves these problems through two things. First, the blockchain, and the Proof-of-Work consensus protocol. Because of these two things, anyone with access to the internet and a computer can join the Bitcoin Network. The most critical part of cryptocurrencies is blockchain technology. This technology ensures high security of transactions and makes Bitcoin popular. In blockchain technology, a “block” record of the owners of all Bitcoin transactions, as well as the previous owners and “chain” of transactions is distributed globally. so it is extremely difficult to change the transaction records.
Some countries like Japan, China, and Australia are where Bitcoin Is Legal. Governments are concerned about taxation and their lack of control over the currency. Since the cryptocurrency ecosystem is growing rapidly. For this day by day, users of Bitcoin and transactions have grown rapidly. Which is nearly 60% per year.
Digital Cryptocurrency : Bitcoin was originally published in The Dark Side on Medium, where people are continuing the conversation by highlighting and responding to this story.