The name bitcoin is derived from the term cryptography. It was created in 2009 with the intention of improving on the existing peer-to Peer technology (P2P) networks like the Internet and WAN networks by making them more secure and private while reducing fees. Due to its unique features, it was received well by most people and businesses around the world.
The core aim of bitcoin is to enable complete privacy and flexibility for the users. But the most interesting aspect of this currency is that anyone can participate in the trading as the system is open to everyone.
Peer to Peer Digital Currency
Bitcoin is basically a peer-to-peer digital currency, which is transmitted from user to user over the peer-to-peer network without any third-party administrators or central bank involved. It is designed in such a way so that anyone, anywhere in the world can connect to the network. Transactions are generally done through the virtual currency 'bitcoins' which are stored in the user's computer or in a safe place with an online wallet.
Unlike regular banks and money lenders, people don't need to go through the traditional means of currency trading when they opt for the bitcoins system. Transactions are generally done via the virtual money that is transferred via a transaction method known as mining.'
The miners who have been assigned the task of mining new bitcoins are given specific instructions about how they should multiply the original coins that have been mined. The difficulty level of mining is based on a mathematical algorithm that dictates the time and difficulty required to increase the number of coins.
The major feature of the system is its peer-to-peer nature. Transactions are completed between individuals instead of through a third party. Transactions are carried out through the use of a digital currency that cannot be altered in any way before it is converted into real currency. It is this feature that makes it different from traditional currencies and is what makes it less likely to be manipulated by governments or special interests. visit here for more information.
Bitcoin Miners and Bitcoin Network
There are two main ways in which people can participate in the bitcoin network. They can mine the bitcoins that will eventually be converted into the actual coins used in the currency. They can also use their computers to process transactions and work with the decentralized setup of the network. Both methods bring their own advantages and disadvantages. Individuals that choose to mine the bitcoins rather than go through the more traditional means of investing will find that the volatility of the market can make it difficult to accurately predict fluctuations in the marketplace.
With no central authority to oversee the operation of the bitcoin network, it comes under the impression that there is no way for individuals to double spend. Because there is no legal way for someone to change the existing private key, bitcoins are considered a digital currency that can never be traced back to a specific person. This aspect of the cryptography used with the system is what makes it appealing to many. People are able to increase the amount of money that they have in the bitcoin currency without worrying about somebody changing their digital currency keys.
Decentralized Digital Currency
It is not known when the bitcoin protocol will be released so there is a fair chance that it will remain a decentralized digital currency for quite some time. Right now, the currency is being used in Japan, New Zealand, Ireland, Canada, Australia, the United States, Sweden, and Germany. By doing this, investors have access to this type of money even if they do not live in those countries. Other currencies are being developed though and it is uncertain how long bitcoin will remain as a top payment system. Right now, it is considered the best form of digital currency because of its security and its ability to allow instant transfer.
Transaction Fee
The fact that the transaction fees that are associated with the system are much lower than most other forms of currencies makes it even more appealing to traders. Investors in other markets can be enticed to move their money over to the bitcoin network because it gives them a method of sending funds instantly and is much less expensive than other currencies. The system may take time to develop more mainstream but for now, it is the best payment system ever created.
Author Bio - Alan Jake, Content marketing Analyst @crective.com (Best link building and guest posting service provider )
