Wednesday, October 20, 2021
HomeCryptocurrency NewsWhat exactly is bitcoin and How do you use it?

What exactly is bitcoin and How do you use it?

Today I will discuss about, What exactly is bitcoin and How do you use it? Bitcoin is a protocol, open source project and peer-to-peer network used as a cryptocurrency, payment system5, and merchandise.6 note 2

It was conceived in 20087 by an entity known under the pseudonym Satoshi Nakamoto, whose specific identity is unknown.8 Satoshi worked on the source code of the reference application9 together with other volunteer developers10 until December 2010, at which time that he decided to end his public activity.

Its traditional unit of account is called bitcoin (in plural bitcoins) and is classified as digital currency. It is used to record and transfer value, 11 and each bitcoin is made up of 100 million satoshis, which is the minimum unit of account .

To keep track of all transactions or “money exchanges” that take place within Bitcoin, a distributed database is used. This database stores the information grouped in blocks scattered throughout the network and linked together, forming a data structure known as a “chain of blocks”. This blockchain is often described as a digital, public, distributed and tamper-proof ledger, in which the history of all transactions made on the Bitcoin network is permanently and verifiably reflected.

Those who register the transactions are the nodes that make up said network, and the Bitcoin protocol defines the rules that govern this system . Due to the fact that it is implemented within a network made up of several communication nodes between equals, where there is no central node liable to be managed by a specific organization, Bitcoin is considered to be a decentralized system, not supported or controlled by any government or central bank, in which transactions are carried out without the need for intermediaries.

It uses a proof-of-work system to prevent double spending and counterfeiting (so that the same bitcoin is not spent several times or arbitrarily minted) and to reach consensus among the nodes that make up the network through the exchange and verification of information thus solving the problem of the Byzantine generals.

Micropayments processing through the Lightning Network or dating through OpenTimestamps are relevant applications of Bitcoin to solve problems in various fields of business.

Criticisms have been raised about its high use of electricity, illegal transactions, decentralization and theft at exchange houses. Although some economists consider that its real value is zero, that it is a bubble and / or that it shows signs of having exceeded the thresholds that would lead it to collapse, not all agree with this opinion.

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