Introduction
Today, various money payment systems are available in the market, built on platforms such as smartphones, the Internet, and digital storage cards. Payment systems such as PayPal, Apple Pay, and Google Wallet have seen continuous growth.
Apart from payment systems that depend on fiat currency, the growing use of digital currency allows for faster and more flexible payment systems for buying and selling goods and services. One such digital currency is Bitcoin.
Bitcoin is one of the most well-known digital currencies today. Bitcoin uses the internet to process its transactions.
History of Bitcoin
Bitcoin was invented in 2008 as mentioned in a paper titled “Bitcoin A Peer-to-Peer Electronic Cash System,” written by Satoshi Nakamoto. Nakamoto wanted to create a completely decentralized electronic cash system that does not rely on a central authority for currency issuance and validation of transactions.
The Bitcoin network started in 2009. According to CoinMarketCap, the total market value of all the bitcoins in the world was $160.4 billion as of March 4, 2020. The Bitfinex which is a cryptocurrency exchange owned and operated by iFinex Inc made the largest transaction of approximately $1.1 billion dollars BTC in cryptocurrency.
What is Bitcoin?
Bitcoins can be referred to as the Unit of currency, a new kind of money for the internet. It is fast, secure, and borderless. It stores and transmits value among users in the bitcoin network. Bitcoin users communicate with each other using the bitcoin protocol primarily over the Internet. The bitcoin protocol stack, available as open-source software, can be run on a wide range of computing devices, including laptops and smartphones, making the technology easily accessible.
Like fiat currencies, users can use bitcoins to buy and sell goods, send money to people or organizations. At specialized currency exchanges, Bitcoins can be purchased, sold, and exchanged for other currencies. Bitcoin is a virtual payment currency. Each User of a bitcoin owns a key that can be used for unlocking transactions in the bitcoin network and putting the control entirely in the hands of each user. Those keys are often stored in a digital wallet on each user’s computer or USB drive.
Bitcoins are created through a process called mining which involves competing to find solutions to mathematical problems while processing bitcoin transactions. The users in the bitcoin network operate as a miner and use their computer’s processing power to verify and record transactions.
