What is Bitcoin?
What is Bitcoin?
Bitcoin is defined by wikipedia as a cryptocurrency where the creation and transfer of bitcoins is based
on an open‐source cryptographic protocol that is independent of any central authority. Bitcoins can be
transferred through a computer or smartphone without an intermediate financial institution. The
concept was introduced in a 2008 paper by pseudonymous developer Satoshi Nakamoto, who called it
a peer‐to‐peer, electronic cash system.
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Benefits of Bitcoin
Bitcoin allows anyone with an internet connection to send or receive payments from anywhere in the
world, at almost no cost. Bitcoin's unique features include pseudo anonymity, decentralization and
irreversibility. The transactions are processed by computers (or nodes) connected to the network. To
process this kind of transaction all nodes maintain a shared ledger balance of every bitcoin address that
holds the balance or that held some balance in the past
Peer to peer transactions (no single authority)
The money sent will reach the recipient without going through any intermediary bank or exchange or payment gateway.
Worldwide payments
Anyone may send as little or as many bitcoin to anyone, anywhere in the world and the bitcoin will reach the recipient quickly and safely.
Almost no processing fee
The sender may choose to send payment without paying any processing fee. The sender may choose toadd a small payment fee to process transactions faster. The network recommended fee is 0.0005 BTC,which is equivalent to INR 3.
Irreversibility
Once a bitcoin is sent, there is no way to reverse a payment unless the receiver sends the bitcoin back to the sender. There is no such thing as a "charge back" with bitcoin. Every computer on the network can see how many bitcoin a particular bitcoin address owns, but the ability to send the bitcoin lies in the hands of the person who holds the private key for that address (which will be safe guarded by the owner of that bitcoin address).
Bitcoin address
A bitcoin address (also known as a bitcoin public key) is obtained by randomly generating the private key and then applying some irreversible mathematical calculations on it.
A bitcoin private key looks like this:
5JTE3dDdnoTBUn4w4M8xdBYBWFcBXHFsFhFsPMQXuhh5vbdGFvg
A bitcoin address looks like this:
1653aikWii2nCq5DCypcVnHEHwZjZopg8J
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