Our world has seen several forms of currencies used in various countries such as dollars, pounds, euro, dinars, and rupees and so on. These currencies were introduced into our commercial world by replacing the good old barter system wherein things were exchanged between the individuals before money was originally invented. With the introduction of cryptocurrency, it looks the world is marching towards the physical money-free financial system by using an innovative tool like bitcoin, etc. Readers can Click here to see the website www.bbc.com/capital/story/20171201-the-wild-week-of-bitcoin where more details about the bitcoin are explained.
This short write up is written to educate the readers about the bitcoin, which is known to be a form of digital currency which is created and held in the e-wallet electronically. This unique digital currency is not controlled by anyone and has no physical identity like dollars or Euros. This is produced in a common platform and fully operated by computers by using some innovative software programs with an introduction of e-wallet. The term cryptocurrency seems to be the first example of a growing type of money in the ecommerce industry. One can trade or buy things with bitcoins, just like the traditional currencies which are also used for buying or trading digitally.
The real USP of this cryptocurrency lies in its decentralized form which is not controlled by anyone like the traditional currencies. In a simple sense, this digital currency is not controlled by any single bank. According to the experts, the bitcoins are ‘mined’ by deploying powerful computations in an e-wallet which is known to be a distributed network of people who subscribe to making digital transactions. In fact, all the processes that are involved in the e-wallet system are made with virtual currency like bitcoin.
Interestingly, the bitcoin protocol restricts a user not to create more than twenty-one million bitcoins. These coins are divided into a smaller element which is known as Satoshi, the name of the bitcoin creator. Our traditional currency has been based on gold or silver. On the other hand, bitcoin is not based on gold but based on some complex mathematics. One can use the software program to find the formula to create a bitcoin. This formula is available in all sources, and anyone can buy or check it. The whole software program is an open source so that anyone can access it.
Bitcoin differs from the traditional currencies in many ways. Basically, the bitcoin network system is decentralized, and every machine works in coordination with the other machines. Hence there is no intervention of a single authority like banks that can tinker with the policy causing any meltdown. Money keeps on flowing into the system even some part of the network goes offline for a while. It is very similar to our email system, wherein our inbox is filled even when we are offline. More importantly, bitcoin transactions are anonymous as the account is not linked with any particular names or addresses of any individuals. Also, the entire transaction is known to be very transparent.