Definition of Bitcoin
Bitcoin is a money transfer and verification system. It uses a completely decentralized network that’s uses peer-to-peer and does not in fact, depend on any central authority.
Bitcoin is a virtual “currency” created in 2009 by an unknown developer under the pseudonym Satoshi Nakamoto. It is a real payment system whose organization does not rely on any central entity, as can be the case with traditional currencies, for example, a central bank. The management of transactions and the creation of bitcoins is handled collectively by the global computer network.
Creator of Bitcoin
The creator of Bitcoin Satoshi Nakamoto describes in his white paper its particularities, which can be advantages or disadvantages. He imagines this functioning from a Wei Dai monetary concept called B-money. He will be able to create with Bitcoin what people have been trying to create since the 1990s. This idea is conceptualized in 2008 and implemented in 2009, Satoshi however withdraws from the project in 2010.
How does Bitcoin work?
This crypto-money is based on a peer-to-peer virtual payment system. Each transaction is stored in a secure public register, the “blockchain”, and does not require any intermediary: it is therefore a decentralized operation, based on a system of nodes. Each new block added to the chain must be checked, secured and then recorded: this is called “mining”. The users who carry out these checks, the miners, are then paid for each new block registered.
Bitcoin is a virtual currency that has no physical existence in the reality. That is to say, you cannot carry Bitcoin with you at a vending machine. These Bitcoins are only found on the Internet and, like gold at one time, are used as a currency for various transactions. It is expected that 21 million Bitcoins will be available when the currency rollout is completed in 2140, but no entity or state will be able to create its own Bitcoins.
Bitcoin an immaterial currency
Bitcoin is completely immaterial. Possession of Bitcoin can only be expressed immaterial by the numbers and letters in a wallet. Portfolios are made up of addresses for receiving Bitcoins. Each portfolio holds a certain amount of Bitcoins that can be consulted by everyone on the block chain. On the other hand, the emission of bitcoins requires the private key coupled with the public key which serves as an address. The keys can be stored in any way (USB, CD, paper, head …) because of their nature which is a sequence of numbers and letters. Many software with user interfaces exist for a multitude of media.
Bitcoin Transaction : How does it work ?
The safety of Bitcoin lies in this principle. The block chain is taken chronologically, which prevents spending the same amount several times. Transactions to be confirmed must be included in a block, one confirmation is enough to consider the security of a transaction, but for those above $1000 more than six confirmations are needed. With this organization it is impossible to modify a previous block and therefore nobody can control or tamper with the network. To validate a transaction it must be public, shared with the network. You cannot make computer-to-computer transactions without using the Internet and therefore the Bitcoin network..
Bitcoin uses key pairing cryptography or asymmetric cryptography To make these transactions. Thus all Bitcoins contain the general public key of its owner.. In order for a Bitcoin to be transmitted from one user to another, the first one must put the recipient’s public address and sign with his own corresponding private key. This key is hard to find and easy to prove. In order to prevent tampering, all these operations are public, except of course the private keys.
Bitcoin What you need to remember
- Bitcoin is a virtual currency found only on the Internet.
- The transactions concluded are all listed in the blockchain, which allows secure and transparent transactions.
- A distinction must be made between public and private keys.
- Numerous security measures make Bitcoin a highly secure means of payment.