DeFi
September 28, 2022
What is Token Burn and it's effects on price
An A-Z guide on token burning and how it is largely impacting the cryptocurrency industry.
Read more
BTC or Bitcoin is the first name out of anyone's mouth when you ask them about cryptocurrencies. Being the first cryptocurrency, Bitcoin has come a long way from where it started. To think that people could have bought it in just a few dollars a decade ago and become millionaires by now is just amazing.
But what makes Bitcoin so special? Why is it that people get hyped up every time it is mentioned? And how does Bitcoin keep breaking records and reaching new all time highs in the crypto market? All these questions will be answered in this article along with many more. So stick around and find out.
Bitcon is basically just a decentralized cryptocurrency which was first described in a whitepaper and then later released in 2009. It is a peer-to-peer digital currency that allows all the transactions to occur between the participants without any third party involvement.
It does not need anyone to provide permission to be traded. Bitcoin was created so that online payments could be sent directly from a person to the other without involving any financial organizations. There had been a few digital currencies before BTC but this was the first cryptocurrency to ever be used.
The total number of Bitcoin that can ever exist is 21 million. Although not all 21 million coins are on the market currently. Everyday, new coins are being mined and released onto the market. After being mined, BTC is then rewarded to the miners who verify and add new blocks to the Bitcoin blockchain.
The people who mine the coins get a reward in the form of Bitcoins. When BTC was launched, the reward used to be 50 Bitcoins per block but every 4 years, this number is halved via the Bitcoin Halving process. Currently, the reward for mining BTC is 6.25 bitcoins per block.
The founder of Bitcoin is quite unknown and people only know him by his alias. The person or group of people were active on the domain for only a short period of time. The founder was active in the development until December of 2010 and held the part to share some tips and information on its profile till 2012. The developer of Bitcoin is known for being the first one to devise the very first blockchain.
Satoshi Nakamoto, the founder of Bitcoin, is pseudonymous and is considered as the one who developed bitcoin. It is said that in 2007, the founder worked on writing the code and registered the bitcoin named domain as bitcoin.org in 2008.
It was the very next year, 2009, when Satoshi and/or team released the very first version of bitcoin software. The 0.1 version of bitcoin software was released with the totally new concept of blockchain and adding the hefty reward of 50 coins to it.
Before that, Nakamoto published a mailed list. It had white paper on cryptography. Nakamoto's involvement with the developer was till 2010, he helped with updates and added written codes. Till date, it is considered that out of 19 million Bitcoins, around 1 million (or probably 75,000 to 1.1 Million) of them are owned by Nakamoto, making his net worth around 73 Billion dollars.
Bitcoin is the biggest and first ever cryptocurrency which was created. Let’s see some of the stats of Bitcoin as of 2022.
The Bitcoin network runs on a P2P protocol. In this peer-to-peer network, all the nodes are peers to each other. There are no special cases, priorities or any hierarchy systems inside the Main Bitcoin Network.
All the active Bitcoin nodes are equal in terms of authority. However, there can be nodes restricted to one or two roles as well as nodes performing all required roles. A full node is the one which performs all four vital roles in the Bitcoin network. The following are types of nodes that work on the Bitcoin networknetwork:
These nodes distribute the work of Bitcoin’s blockchain among themselves for continuous operation. Every node makes sure the blockchain services are being delivered uninterrupted. Now you must be wondering what makes this Bitcoin network secured and encrypted? Well then, let’s see how it's done.
Bitcoin being the first cryptocurrency makes use of a proof-of-work(PoW) consensus mechanism. This system makes sure that the transactions are validated in an organized and secured manner without any manipulation.
The Bitcoin nodes we talked about earlier share the same database and hence any suspicious entry can be detected and eliminated by the PoS system. To further secure the network, additional encryption methods are incorporated by the Bitcoin network.
Bitcoin is encrypted by a hash function with 256 bit encryption protocol. This hash function is a type of digital signature encryption method by which the data and privacy of users are protected. The SHA-256 encryption used by Bitcoin is also used by government agencies and in fact it is developed by the National Security Agency of the USA.
There are many pros and cons of Bitcoin, let's start with a good part to see some positive aspects or advantages of Bitcoin.
Bitcoin being a decentralized system has complete transparency. The Blockchain system is completely public and everyone can have a glance on transactions, even with the features like being anonymous, there is no chance of getting scammed during any transaction.
It is so secure simply because of the transparency as well as the traceability, where you can easily check on the block and look at every single transaction of that asset.
The Fluidity factor is of prime importance when it comes to international transactions. You may have never realized the same fluidity while sending an email or some text message on social media where it gets delivered in seconds and all this process happens just because of the internet.
While doing the international transaction with fiat currency, people experience paying huge charges for it. But for bitcoin, it doesn’t matter what corner of the world you are from, you can process the transaction quickly with a minimal to no transaction fee. The low transaction fee is almost negligible, making the transaction more feasible over the globe.
We saw a few main advantages of bitcoin, now let’s have a look over a few disadvantages and where Bitcoin lags a bit.
Yes! You can lose your assets and to be frank there will be no way to recover any of that back. If you hold a huge asset of bitcoin, you will definitely not hold any of those on hot wallets. If you do, there is third party involvement and you might have to endure some risks of hacking. Because only the transaction and blockchains are protected and secured from hackers, not the hot wallets.
Hot wallets do have security but as it is completely online there are chances of it getting hacked. Speaking about the hard drive or cold wallets, they are a completely different story. If you lose your security key, there is no way for you to recover your assets back. If you share your password with someone and they steal your assets there is no way that you could recover them and even if your hard drive got corrupted then you will experience a huge loss.
Viruses can even destroy the hard drive, so protection of your hard drive is very important, anything that messes with your hard drive can make your bitcoins vanish and they can't be recovered.
Bitcoin being a cryptocurrency largely depends on the market behavior. This factor makes bitcoin sound less appealing. Bitcoins have a lot of price drops and rises at regular intervals. So from an investors point of view, it might not be an ideal option.
Because of high fluctuation, investors consider it as more of a risky option. Along with that there are different laws and regulations implemented according to different countries, so you cannot have the same oversight as your friends from other parts of the globe.
That was all about Bitcoin (BTC), one of the most, if not THE most, popular cryptocurrencies in the world. A lot of people would tell you when you should invest in BTC but when it comes to money, you should do your research properly and only then should you spend it.
Investing in BTC can prove to be a great decision if you time it correctly. Just make sure you only invest the money that you can afford to spare. Hopefully all the statistics and advantages and disadvantages that we mentioned in this article would help you in getting a clear picture about Bitcoin. Do check out our site for more articles on cryptocurrencies.
An A-Z guide on token burning and how it is largely impacting the cryptocurrency industry.
Whitepapers and Litepapers are both essential to research related to any crypto project. Get to know what they are and how to use them effectively.
Here is a list of crypto jobs you can apply for along with the resources to find jobs.
