For ease of understanding of bitcoin, we can simply carry out a broad conceptual divide on it and we have two parts. First is where there is a bitcoin, which is simply the token, some lines of code which defines the ownership and it is similar to IOU. In the second compartment, we have bitcoin protocol which is just a network distributed widely and where an electronic ledger is built-in that take care of balances of bitcoin which are referred to as a token.
In such an electronic framework, users send and receive payments but unlike any dominant authority as in case of banks or any payment gateway. Bitcoins are created through the use of computers which are networked and operated through open-source software.
Cryptocurrencies are the prime instances of bitcoin which also show-up classic aspects of currencies which are used traditionally and verification is done through cryptography.
Creation of Bitcoin:
Credit goes to a visionary software developer Satoshi Nakamoto who developed bitcoin in 2008 where he crafted and implemented a sound mathematical logic. The central idea was to induce an independent means of exchange making best use of the digital framework for swift transfers but without involving any central authority. The network is programmed to ensure security, verification and safe means of exchange.
Even though bitcoin, has taken of across the globe but Satoshi Nakamoto still remains an obscure figure.
Drastic Shift From Traditional Means Of Exchange Using Currencies:
For bitcoin to be an acknowledged means of exchange, both parties should agree to be at play and under such circumstances, bitcoin just appears to be like dollars, pounds, euros, etc. But then, there prevail a range of differences between bitcoin and other digital currencies, such as:
Decentralization has been the most striking feature of bitcoin and there is not regarded as any centralized authority to control the exchanges. Rather, there is involved supreme excitement of a few coders who voluntarily support the network with skills and expertise. Besides, a bunch of computers is also there which remain dedicated and are positioned across the globe. Sans doubt, such an arrangement appeals to those who dislike the abundant control and too many terms and conditions, which banks and governments impose over specific currency and on its flow.
With bitcoin in use, the intended purpose is to address the issue arising from “double spending” as electronic currencies can be copied and re-used, thanks to financial incentives and cryptography. Further, banks remain central in electronic currencies but in case of bitcoin, with widespread distribution of network which remains open and transparent, integrity and security of transactions are ensured, as no one remains at and as the central force.
Supply Is In Control:
For bitcoins’ supply, there is exercised a greater control and innate also is to be appreciated for this. Every hour witnesses the spring of limited sum of bitcoins out and such a scenario continues till the figure of 21 million is met. Such a feature makes bitcoin, a most prolific asset where value is bound to increase if demand strengthens but supply remains unchanged.
In contrast, other currencies such as dollars, francs, euros, etc, unlimited supply are there as central banks can print as many notes as they wish, for whatever denomination, simply in order to exploit its value. As such, for those with pockets full of any such currency, are likely to bear the brunt of such a change in currency value.
Real Names And Identities Are Not Needed:
Bitcoin enables users to transact freely without involving any validating authority such as central banks, as in case of currency, and they can send and receive bitcoin to each other. As such, when a transaction request is initiated, protocol comes into action to check if there are enough bitcoins with a user and if that user is valid to send or to transact. User identity is not an issue in the case of bitcoin exchanges.
The practice is so exciting that every user enjoys a wallet which is identified by a unique address and hence, every transaction is traced or is traceable in such a way. Besides, law enforcement and financial police can also develop unique digitized methods to check for users, in such a way.
Then, in many countries, there are laws which require customer identities to be established before bitcoins are sold or bought and in this way too, use of bitcoins can be put under a vigil. Every transaction remains under proper sight and scrutiny of others since the network operates in a transparent manner.
Clearly, terrorists and money launders and those with any such heinous intent, are likely to stay away from bitcoin as well as from its use.
Transactions Remain Stable And Unchanged:
Transactions involving bitcoins can never be undone or reversed as we see in electronic transactions. This is chiefly because of the absence of any central authority which can dictate the transactions and can order the return of money. When a transaction has taken place and the network is enabled for it and a sufficient time-frame is there, say an hour, changes are hard to impose.
Great Divisions Within The Core Of Bitcoin:
Satoshi is the smallest unit that a bitcoin has and going by today’s price index, it is one hundred millionth of a bitcoin, which is 100th part of a cent. Clearly, transactions can be implemented on the smallest level which is next to impossible when any traditional money is involved.
In final words, we can easily conclude that Bitcoin has been a boon to businesses and professionals who simply intend to adhere to a safe, secure, quick, and sophisticated and a verifiable mode of transaction. At this point, Zuflo.io feel elated to proclaim that we are a prominent Bitcoin consultant located and we take pleasure in solving problems related to safe and recorded transactions, meant for businesses as well as to cater to individual needs of making or receiving payments.