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Bitcoin is the first virtual currency of the Internet. You can also call it
Cryptocurrency. It has existed for several years now but many people
wonder, “what is bitcoin” and “how bitcoin works”.
…First Bitcoin came into existence in 2009 and the price is continuously
fluctuating on the international market.
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Bitcoin was the first cryptocurrency/digital currency invented and until now,
nobody knows who invented it.
But:
Ethereum
Litecoin
Peercoin
Feathercoin
They all are also called altcoins because they developed after bitcoin. Now,
anyone can create cryptocurrency and that is called blockchain
development.
One of the key advantages of bitcoin is, it can be stored offline on person’s
local hardware. This process is called cold storage of bitcoin.
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So it protects the currency from being taken by others. While when you
store it online, there are chances somebody hacks your PC and steal it from
you.
When you store the currency online that process is called hot storage.
But all the advantages come with some disadvantage and in bitcoin, when
you lose your hard drive it means you lose your bitcoins. There is no way to
get it back.
Also read: Why to Implement Bitcoin Payments into Your Website & App
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Bitcoin is the virtual money designed to be self-contained for their value. It
does not need any banks to store or move the money.
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Once you have bitcoins, they behave as physical gold coins in your pocket.
You can purchase expensive things online using it or you can just hold them
as an investment and wait for the price to increase.
…A wallet is the small personal database where you store the coins. It can
be your computer, smartphone, tablet i.e cold storage or it can be stored
online in cloud i.e hot storage.
For all the intents this currency is highly secured and it is computationally
and mathematically so intensive, that to create a bitcoin, it isn’t financially
worth for the frauds to manipulate the bitcoin system.
As you can see in the above infographic, there are 6 steps involved in exactly
how bitcoin works.
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The nodes (individual links of the chain) verify the users involved and the
computational record of the transaction.
This is the final step of how bitcoin works. Here, when the transaction gets
complete, the goods or services are exchanged.
So this was all about what is bitcoin and how does it work.
Interesting Bitcoin Facts:
3. Founder of bitcoin owns $15 Billion plus in bitcoins (as of January 2018).
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3. Bitcoin is untraceable.
4. If you lose your bitcoin private key that means you lose your bitcoins.
Conclusion:
So, this was all about what is bitcoin, how bitcoin works and some
interesting bitcoin facts.
Blockchain and bitcoin is totally new industry and a lot of people are
showing interest in developing their own blockchain/cryptocurrency
People are also integrating bitcoin payment option in their website and
mobile apps.
Do you have any other interesting information about bitcoin, which I might
miss above? Do let me know in the comments below.
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