The Bitcoin virtual currency is increasingly present in the mainstream media. At this point, the value of a Bitcoin is close to $ 20,000, and the total capitalization is nearly $ 300 billion, above the market value of most international corporations. Bitcoin is the first virtual coin system created by the anonymous Satoshi Nakamoto in 2009.
Bitcoin and the technology behind it, blockchain technology, are considered revolutionary, making it possible to transform society and the current economy fundamentally. Many analysts consider Bitcoin’s discovery and implementation as having the same magnitude in a community as the discovery and widespread deployment of the Internet.
In this article, I propose to explain what the Bitcoin Code is, where its value comes from, why is useful, and what are the possible future developments of the coin. I will share the article in two parts: in this first part, I will explain without technical terms, cryptographic or mathematical terms. It is intended to be a concise article on the subject and benefit the non-technical persons.
What is Bitcoin?
The bitcoin system is a global registry of cryptographic transactions. We can compare this global register with a ledger in which each record in the log is a transaction in Bitcoin (A sends to B the sum of x Bitcoin), and each page of the book is called block and includes several transactions (2,000 transactions in a block).
Just as the pages of the accounting register are linked (they are numbered or inscribed, we can not break or modify a page without invalidating the account balances in the following pages without invalidating the entire registry), as well as blocks containing bitcoin transactions are linked between them cryptographically. The blocks are chained, hence the name of the blockchain.
The accountant who validates and signs the integrity of the registry is called the Bitcoin Miner. Any change to a transaction in a block invalidates all the operations in the blocks that follow. A trade once done is forever in the blockchain, and no one can delete or modify it. The database or the BitChino transaction block is: a) transparent, b) public, c) global, d) immutable, and e) decentralized.
A transaction contains, among other things: a sender (who sends Bitcoin), a recipient (who receives it) and an amount. It can be verified from the first Bitcoin transaction (since 2009), the sender, the recipient or the amount sent as well as where this amount occurred (can only appear from a previous operation, someone in an earlier transaction that addressed the current amount to the sender ). Cryptographic keys give the identity of the sender and receiver. The initial bitmap that describes Bitcoin and how it is used is found at this URL.
Anyone who can see the bitcoin transactions can have a copy of the whole blockchain.
A copy of the blockchain is found on tens of thousands of computers around the world. Blockchain automatically syncs with all of these computers. Anyone can check any transaction starting with zero, the first bitcoin transaction in 2009.
No transaction once added in the block, cannot be modified, deleted or canceled. It’s forever in the blockchain.
There is no intermediary; there is no one who regularises, approves transactions or guarantees for Bitcoin.
Other frequent questions that many people ask and which I will try to answer are the following:
Physically, what is this Bitcoin?
The Bitcoin coin is just a transaction between A and B, namely Sending Bitcoin’s B to B. From that moment B has an extra bitcoin x and A has an x bitcoin in minus. Transactions are made with an application called Wallet. Nothing more.
How do the new coins appear?
The accountant in the analogy above, the one who guarantees and signs the integrity of the registry is called Miner. It validates a costly cryptographic operation from the resources used (processor, memory, and electricity consumed) the new block, which will be added to the existing block. It is said that miner moves the block.
For it, he gets a reward that is currently 6.5 Bitcoin. A new block appears every 10 minutes, and 6.5 Bitcoin appear every 10 minutes. Anyone can be a miner, but only the first miner, the one who validates the transactions and creates the new block, will receive the reward.
How many coins exist?
There are about 17,000,000 Bitcoin and will grow (see above) as high as 21,000,000. It is a non-inflationary virtual currency (compared to the classic financial system called “fiat money”).
Check this out: https://coincentral.com/how-many-bitcoins-are-left/
Does Bitcoin have divisions?
Sure it does. Spending at the current $ 20,000 would be hard. A bitcoin is divided into 10 to 18 parts or 1 bitcoin = 0.000000000000000001 Satoshi, where Satoshi is the bitcoin subdivision.
How can I get Bitcoin and where do I keep it?
There are three ways to buy bitcoin. The first one is mining (extremely complicated process). Drilling means validating new transactions in a new block and adding to the existing blockchain. It is the reward of the miner, the “accountant.” It is a costly operation that involves solving an incredibly complicated mathematical problem that cannot be done with a regular computer. The second option would be by receiving bitcoin (or division) from someone who already has it. X sends me 0.0001 BTC. BTC is the abbreviation of the currency just as the USD is the abbreviation of the American dollar. The third one is by buying from a trading platform called exchange. There are several exchanges among which coinbase.com, bitstamp.net, bittrex.com etc. The bit is kept in the exchange account or in a personal electronic wallet. Electrum is a classic wallet for Bitcoin. It is used to store coins, but also to send or receive Bitcoin coins.
Who gives its value?
There are two different concepts, namely: Bitcoin as a store of value, Bitcoin as a value-saving option, and savings just like gold. Someone instead of keeping gold or cash in a safe or at the bank keeps bitcoin. Bitcoin is digital gold. The advantages are numerous. Bitcoin and gold share many properties: limited volume, robust to buy, high value and decentralized. – “Bitcoin as currency,” a means of exchange like any other currency we can purchase goods and services. Some cards automatically change bitcoins in other currencies, and we can pay with them to merchants (if they do not directly accept Bitcoin). Just like gold, whose value is considered to be the intricate utility of metal, value gives people the desire to have bitcoin, the confidence that it is valuable and that it will maintain or increase its value over time.
Bitcoin is safe Bitcoin
The blockchain is 100% safe. There were no security incidents and is considered at this time to resist including organized attacks from an entity with extensive resources such as a state. Warning: there are many situations where the owner has lost the private key that offers ownership of the Bitcoins inmates, the key was stolen from the computer, encrypted by ransomware or exchanges were broken by hackers and all stolen coins. These severe security incidents did not have to do with the Bitcoin blockchain. If we follow all the Bitcoin security recommendations, the personal wallet is at least as secure as a Swiss bank vault.