Bitcoin : The unstoppable financial revolution ! ₿
Bitcoin (from the English word “bit” meaning a binary unit of information (made up solely of 0s and 1s) and “coin” meaning a coin) is a cryptocurrency used as a peer-to-peer payment system. It was invented by Satoshi Nakamoto in 2008 and released as free software in 2009.
Its unit of account is the bitcoin, limited to 21 million units and divisible to the eighth decimal place. A satoshi represents the smallest unit of bitcoin (1 satoshi = 0.00000001 BTC).New bitcoins are created and distributed to people who ensure the security of the network. All transactions are verified by the network nodes and recorded in a public, unforgeable register known as the “blockchain”. Anyone can access this ledger and see that address A has sent BTC to address B.
The system operates without any central authority or single administrator, but in a decentralized way, thanks to the consensus of all the nodes on the network. It is therefore impossible to prevent someone from carrying out a transaction, but it is also impossible to cancel one.
Nobody controls it, and nobody can choose to reverse it unless more than half the people securing the network agree !Bitcoin is the largest decentralized crypto-currency, with a market capitalization of over $1,000 billion in March 2021. To transfer Bitcoins, you need to possess your own private keys, which prove that you are carrying out the transaction (and that you possess the Bitcoins).
When you store your bitcoins on platforms, also known as “exchanges”, they own your private keys, so you’re not the sole owner of your BTC. To be an owner, you must be the only one who knows your virtual keys. Wallets allow you to store your private keys so you can check your BTC balance.
There are different types of wallet, the most secure being those that do not have access to your keys, so only you can dispose of your Bitcoins. Since its creation in 2009 and the 2013 closure of Silk Road by US authorities, criminal networks have primarily used bitcoin as a medium of exchange.
This includes online gambling, the purchase of illegal substances and hacked databases. However, in recent years, the cryptocurrency has matured and a growing number of studies conclude that these illegal activities, while still existing as in any payment system, represent only a minority share of its transactions.
Since the end of 2020, many companies have been communicating about future purchases or uses of this cryptocurrency.It all started with MicroStrategy, which invested $250 million in August 2020. PayPal followed in October 2020, announcing that it would be possible to obtain bitcoins through them. Tesla announced in February 2021 that it had invested nearly $1.5 billion. The highly expansionary monetary policies of central banks in many countries could be the cause.
Bitcoin Billionaires
A True Story of Genius, Betrayal, and Redemption” by Ben Mezrich. This narrative non-fiction book follows the journey of the Winklevoss twins, early Bitcoin investors, and their experiences navigating the volatile world of cryptocurrency, shedding light on Bitcoin’s potential for generating wealth and its impact on individuals’ lives.
Official currency symbol: ₿
Abbreviations used by exchange platforms: BTC and XBT
How the bitcoin network works ?
Different individuals carry out transactions. Bitcoins are sent from one address to another, like sending funds between bank account numbers. The latest transactions are grouped into blocks every 10 minutes.
All nodes receive these blocks (they maintain the history of the blocks, and thus the history of the transactions). All nodes collect these new transactions Nodes that provide a proof of work (to solve a mathematical problem) attempt to validate their blocks to receive a reward.
When a node finds the solution to the mathematical problem, it sends its block to all other nodes in the network. The other nodes verify that the transactions in the block match those they originally had in the distributed block.
If most nodes accept the block, the system creates a new block containing a trace (hash) of the previous one. These blocks are connected like a chain, giving rise to the term “blockchain.”
Where can I buy Bitcoins?
You can obtain Bitcoin (BTC / XBT) in several ways:
- On an exchange: a crypto-stock exchange. You can buy by bank transfer, credit card, and a few other offers
- At a physical bureau de change or automated teller machine (ATM)
- On an online marketplace like LocalBitcoins via a classified ads site and then make a physical exchange
Is it worth investing in bitcoin ?
It all depends on your appetite for risk and how long you intend to keep your bitcoins. People who hold on to their bitcoins for several years rarely lose money. But past performance is no guarantee of future results.
Before investing, we recommend that you educate yourself about how bitcoin works, and don’t invest money you can’t afford to lose. Invest little by little and be eager to learn. Even if you don’t make any money, you can learn a lot about finance, economics and computing.
That was David and thanks for reading, I hope the article was very informative.
Feel free to share this with your friends, and leave a comment.
Leave a Reply