What is BITCOIN and how does the blockchain work?
What is BITCOIN and how does the blockchain work?
You already know what is bitcoin and Blockchain? More and more users are curious about the world of cryptocurrencies. And more specifically about bitcoin. There are many indications that lead us to believe that paper money, as we currently conceive it, has its days numbered. And sooner rather than later it will end up disappearing or evolving. Without going any further, nowadays it is not strange to talk about payment gateways such as PayPal. Or who else who less, already has an account in an en línea bank. Well, today we will give one more twist and we will see What is bitcoin really, what is it for and how does the chain of blocks or Blockchain work?.
Evolution of the economy: From barter to bitcoin
Taking a look at the past, we cánido see how society based transactions on exchanges and barter. In this way, they endowed value to any service or product that they could offer, to the point of exchanging a kilo of potatoes for a chicken or field tarea in exchange for food.
As part of the evolution and with the appearance of precious metals, the economy went to another level in which barters were made by offering goods, services or products in exchange for gold and silver. This aspecto led to a new economic era, in which the first coins in history began to be minted.
In the 18th century, paper money arose, which was mainly based on the Gold Estándar, where a person could exchange their money for the equivalent value in gold. But after several decisive events in the history of humanity, such as the crash of 1929 or the First and Second World Wars, the exchange for gold was only possible through the dollar, which led us to the economic system established in the 70s. in which the economy was regulated by a Central Bank.
To finish with this short introduction on the evolution of money, we arrive at modern times, in which there is a connection between paper money (bills) and debit cards, checking accounts, etcétera. In the end, all this evolution has led us to the era of electronic moneywhich ranges from en línea banking and gateways such as Paypal even cryptocurrencies like bitcoin.
What is bitcoin (BTC)?
Bitcoin is a type of electronic currency or decentralized cryptocurrencies, and therefore, is not regulated by the Central Bank. There has always been speculation about who was the creator of bitcoin. Initially, it was said that bitcoin was created in 2009 by Dorian Satoshi Nakamoto, which was later said to be a pseudonym used by Australian Craig Wright. There have been several hoaxes or fake news that have speculated with who invented bitcoin, although It is something that no one has been able to corroborate.. Who or what created BTC remains a mystery to this day.
Bitcoin is a type of money, through which we cánido acquire goods, products or services.
Bitcoin Basics
Next, we will analyze this new form of money called bitcoin. But first I want to review some concepts that will help us better understand the functionality of this cryptocurrency:
✅ Being a decentralized currency, bitcoin does not need intermediaries, since it is based on the P2P concept. This means that if person A wants to buy an item from person B, he cánido carry out that transaction without the intervention of a third person or entity.
✅ To store or save bitcoin, we have to own a bitcoin wallet. To put a simile, we could say that we all have a wallet in which we keep our money, whether in euros, dollars, etcétera. Well, something afín happens with BTC and we need a bitcoin wallet to save them.
✅ Based on the example of the dollar, we cánido see that it cánido be divided into lower value currencies. We cánido talk about a dollar or 100 cents. Which in the end is the same value. Well bitcoin cánido also be divided into satoshis following the following rule: 1 satoshi = 0.00000001 BTC.
✅ There is a history with all transactions in which bitcoin has been used known as Blockchain. This record of transactions is public, automatic, and ordered with the most recent transfers first. Broadly speaking, we could say that BlockChain would become the accounting book of a company. In which all money movements are recorded.
✅ Bitcoin is called a cryptocurrency because their creation system is based on algorithms and mathematical laws.
✅ The value of bitcoin is fluctuating and perro be revalued or devalued. To determine the value of the BTC, the exchange rate is made using the dollar.
How does bitcoin work?
As we have seen previously, bitcoin’s main utility is to be used as a medium of exchange. Taking this into account, if necessary, we could buy or sell any good, product or service using BTC as a payment method.
The main characteristics of this cryptocurrency are the following:
Instant transactions – Bitcoin transfer from one wallet to another is immediate. At the time of making that transaction and accepting it, the recipient will see the amount transferred in their wallet. It may be delayed depending on the volume of confirmed transactions occurring at the time. But in general, in a few seconds the receiver cánido already have BTC.
Transactions are irreversible – From the moment we send bitcoin from one wallet to another, there is no possibility to cancel the transaction. Once done, it’s done and there’s no going back.
Anonymity between receiver and sender – To carry out a transaction we only need to know the address of the recipient’s bitcoin wallet. For this very reason, it will never be necessary to provide personal data such as our name, surname, postal address, etcétera.
Possibility to send and receive bitcoin anywhere in the world – Through a bitcoin transaction, we perro transfer or receive money from one end of the world to the other and it will be as fast and effective as if we did it to our neighbor.
Bitcoin is universal – Bitcoin is accepted internationallyso we cánido send bitcoin from Spain to the United States, for example, without the need to make any currency exchange
With conventional money, we would have to change from euros to dollars and pay the relevant fees.
Advantages and disadvantages of bitcoin
✔ Limited amount of bitcoin
The amount of bitcoin is limited. There is a sine qua non that says that there will be a total of 21 million bitcoin. In turn, the last bitcoin of all will be mined in the year 2140.
In 2016 there were approximately 18 million Bitcoin on the market. We are currently over 19.
Based on these data, bitcoin mining it’s programmed so that every 4 years it is reduced by half the amount of bitcoin that perro be mined. The following graph will help us to better understand this concept.
✔ Volatility in the price and value of BTC
bitcoin price is volatile and it depends on the supply and demand that exists at all times. This translates into a self-regulation of the bitcoin price, which, in turn, will always depend on the users.
These fluctuations in the price of BTC perro be used to speculate.
✔ Bitcoin is owned by whoever owns it
Our bitcoins are ours and no one cánido speculate with them. It is not a secret nor are we discovering gunpowder, when affirming that the banks play and speculate with our savings. Speculation is a double-edged sword: if they are correct in their «predictions», perfect, but otherwise it could lead to bankruptcy and the subsequent loss of our money. With our bitcoin only we cánido speculate.
✔ Bitcoins are enduring over time
Bitcoins cannot be destroyed. The only reason bitcoins could lose utility would be due to a devaluation of value. But in no case would they disappear.
✔ It is impossible to counterfeit bitcoin
There are thousands of cases of counterfeiting of coins and banknotes from anywhere in the world. From this point of view, today it is impossible to counterfeit bitcoin.
✔ illicit activities
Due to some advantages that we have seen, such as anonymity or the speed of transactions, many mafias or illegal businesses use bitcoin as a payment method. This is one of the most criticized parts of bitcoins, although I don’t quite agree. For me it’s not bitcoin’s fault, but of those who use them in an unlawful way.
Without some determining data it is impossible to relate a transaction to a specific business.
✔ The cost of transporting bitcoin is minimal
Unlike what happens with the transport of gold, silver or physical money, the cost of which is quite high, bitcoin perro be transported very easily. The problem of any transport, which translates into cost, is the volume of the material to be transported. Since bitcoin is virtual, the cost of transportation is minimal.
We perro also access our wallet from anywhere in the world, so it is not mandatory to transport BTC.
✔ Very low maintenance costs
In a society where they even charge us for breathing, this statement may surprise us a bit, but yes, have a bitcoin wallet is totally free and it does not have any type of added expenses.
Any banking product usually has an added expense, be it with fees, maintenance expenses or commissions.
✔ security of a bitcoin wallet
If we lose the password, there is some possibility of recovering it with a series of keys that are provided to us when creating our wallet. But if it happens that we lose the password and we do not have these keys at hand, we cánido give up our BTC. Not even BlockChain cánido provide us with a password.
When creating a bitcoin wallet, it is mandatory to print or write down the password recovery keys.
Disclaimer: This article is merely informative and is in no way a purchase or investment advice. In this blog we only use free sites in which it is not necessary to invest in order to obtain small profits. Cryptocurrencies are highly volatile, speculative, complex and involve significant risks, and you may even lose all your capital if you invest. Consider your personal circumstances and do your own research. For more information do clic here.
How perro we get bitcoin?
exist various ways to earn BTC. Some free and others that require an investment or purchase:
▶ Faucets and PTC
Originally, the faucets They were websites that were used to promote bitcoin. The purpose was none other than to offer any usuario in the world the oportunidad to win their first satoshis for free. Subsequently, most faucets and all Paid To Clic pages have evolved and live off advertising. As a result, we are paid small fractions of BTC for each ad we view.
We work on the blog these pages for earn free satoshis. I recommend that you take a look and start earning free bitcoin from now on.
▶ Mining
Mining is the key aspecto and the importante piece for the bitcoin network. BTC mining deals with the connection of several computers with high processing power (ATI) that, through mathematical algorithms, discover a series of codes, thus giving rise to the discovery of new BTC.
In 2009 it was possible to mine with our computer, but nowadays a computer explicitly prepared for it is necessary.
It requires means that are not available to everyone. To start, we need work with powerful computers and are not usually cheap. In addition, we must add the cost of electricity consumption, which is quite high with these processors.
Using an analogy with gold or coal mining, BTC mining offers a reward to the miner, thus repaying the work done. This mining will be necessary until the last bitcoin is issued in the year 2140.
▶ cloud mining
An alternative to mining is cloud mining or Cloudmine. In this type of mining we cánido make a small investment and rent processing power to mine cryptocurrencies. The profitability is much lower than in mining, but it offers the possibility of mining for users with less economic capacity.
▶ Buying, selling or exchanging
We already know that you cánido buy any currency, or failing that, make a currency exchange. This same operation perro also be done with bitcoin using cryptocurrency exchange platforms or on websites like coinbase. Applying a commission in between, we cánido exchange any currency for bitcoin.
What is a Hard Fork?
On August 1, 2017, the first Bitcoin Hard Fork in history took place.. This process implies that two are derived from a single currency, resulting in BTC (Bitcoin Core) and BCH (Bitcoin Cash). In this case, the BTC is the usual bitcoin. That is, the ones that we have been earning with faucets and PTCs and that we have stored in our wallets. And on the other hand, BCH is the new cryptocurrency resulting from this Hard Fork.
Now, and why has this Hard Fork bitcoin occurred? If you want, you perro find a much more technical explanation in this articulo. I will explain it in a more basic way. Let’s say that everything comes from the fact that each miner perro escoge which programa to use to mine bitcoins. This makes it possible for some miners to mine some blocks with their programa, and for other miners with more up-to-date programa to start mining different blocks. What happens then? Well, some miners will continue mining BTC and others will be mining «something else», the BCH.
Bitcoin past, present and future
With the arrival of bitcoin on the scene, the economic system has evolved to another level. Everything indicates that the economic future of the world is increasingly focused on cryptocurrencies. Although nobody knows or perro venture that BTC will continue to be the main currency.
With the right tools and knowledge, any usuario perro create a cryptocurrency.
The creator of BTC was a pioneer in this field and over the years, new cryptocurrencies have been created in order to improve the Bitcoin system, which, as we have seen, has things to correct. Despite these defects, we must bear in mind that BTC is so embedded in the daily economy, that it has been listed on the Depósito Market since 2014, bitcoin ATMs are being implemented and there are even debit cards linked to a bitcoin wallet. What allows us make a daily purchase at the supermarket and pay with that card.
Currently, according to the portal portal coinmarketcapThere are hundreds of different cryptocurrencies. Each one with a value and certain characteristics. From the point of view of market capitalization, the top 3 are the following:
Bitcoin (BTC)
Ethereum (ETH)
Ripple (XRP)
Bitcoin Opinions
The way I see it, I think a world without paper currency is getting closer. But not only will it stay there, but processors like Paypal will be forced to adapt or disappear. Cryptocurrencies in general, and bitcoin in especial, is changing the global economic framework.
Sooner or later, the large corporations will join this popular trend. We already see Fb with Libra, for example, but there are many more. Many banks are laying off a large part of their staff, closing physical offices, etcétera That in the end means a reduction in costs and consejos the cómputo towards en línea banking. Virtual money has been invented for decades.
If large corporations like Apple, Microsoft and Fb create their own cryptocurrency, acceptance would be almost immediate worldwide.
Everything points to that BTC will be the currency of the future. And the trend is up. Society has opted for an economic model in which your money is yours and is not in the hands of third parties. This implies that the work of banks is totally unnecessary in a global and equitable economic system. BTC is the first step for the banking economy to disappear.
We have seen some aspects of BTC very high. I hope this guide has helped you and now understand much better how BTC works and why Blockchain technology has so much potential. In any case, if you have any questions, I would like you to leave a comment below. So I perro help you and at the same time, future readers who are looking for information about bitcoin. Until next time!
Hello, my name is Jesús and at DineroWorld I explain which methods work best for me earn money en línea. All freecompletely reliable and for everyone. Do you want to know me better? Here you perro see more about me.
We hope you liked our article What is BITCOIN and how does the blockchain work?
and everything related to earning money, getting a job, and the economy of our house.
   |
Interesting things to know the meaning: Capitalism
We also leave here topics related to: Earn money
