Bitcoins are the digital cash or virtual currencies, which were published in a white paper in the year 2008, by Satoshi Nakamoto. They operate in a decentralized manner, and hence there is no single server for all the computers connected in the network. There are no controlling authorities like banks or any government agencies, and hence, the transactions take place in a quick manner and without any transaction fee. This article details about key features of Bitcoins, working on Bitcoins how to acquire bitcoins and lots more in the following sections.
Key features of Bitcoins
The Bitcoins are virtual currencies, where you can make transactions utilizing wired banks, cheque, or cash. When you user 16-digit, encrypted signature for purchasing goods or services, the buyer with his smartphone, decrypts using a private key to get your BTC Boom. The key features of Bitcoins are: they are decentralized, transparent, and highly secured. The main backbone to attain all these features is due to blockchain technology, applied by Satoshi in a bitcoin transition.
Blockchain technology is a public database, where every transaction is stored as blocks. Each block after validation, will be encrypted with a hash code and then attached to the transaction chain. All the nodes, connected to the bitcoin network, will be able to download this large public database.
- The first bitcoin was mined in the year January 2009, by Satoshi Nakamoto.
- The first bitcoin transaction was initiated by Satoshi, in the year January 12th, 2009.
- On December 16th, 2009, the Second version of Bitcoin was released.
- In the year 2012, Block 181919, made 1322 transactions, and which is the largest block to date.
- Later Bitcoin forks created Litecoin and Bitcoin cash.
The following are the properties of Bitcoin transactions. They are:
- Bitcoin transactions are irreversible: Unlike traditional currencies, the money you sent to a particular biotin wallet address is never reversible as the transaction cannot relate to any personal details of the wallet address. So, make sure the receiver is genuine, and you are sending it to a correct wallet address, to avoid issues.
- Anonymous: The Bitcoin transactions are visible to everyone connected to the network. But, the real identity related to the wallet address like name, address, the phone number is not revealed.
- Highly secured: As the blockchain technology acts in a decentralized fashion, if a hacker tries to hack a node or try to alter the transaction, it will be notified to all the computers connected in the network. Only the private key owners will be able to send the Cryptocurrency, with a digital signature composed of 16-characters, as an authorization method.
- High-speed transaction: As the transaction takes place in a computer connected globally; it will take only minutes to send a transaction and get a confirmation message of the transaction. Sending bitcoin to your next house neighbour and sending bitcoin to a friend living in another part of the world, will take some time only.
Working of Bitcoins
As the Bitcoins are decentralized systems, there are no banks or any authorities to monitor and control a bitcoin transacting. So, how does Bitcoin work? Imagine Alice wants to initiate a Bitcoin transaction. For this, Alice has to download the wallets intended for Desktop or mobile or web or paper or hardware. Then, using the wallet software, Alice would sign-in to initiate the transaction. The Wallet application can be used by Alice in 3 ways:
- When the application is used as a full client, there will not use any third-party servers and Alice should be able to handle all the processes involved in the transaction.
- When the Light-weight option is used, to store Alice Bitcoins, an email client, must connect to a mailer server. To initiate the transaction, a third-party-owned server is required.
- In Web-client-based applications, the entire process relies on the third-party-owned server, where Alice’s operation is replaced by the third-party server.
Where to get Bitcoins
People will be able to acquire bitcoins y means of the following:
- Bitcoin exchange
- Bitcoin ATM
- Local Bitcoin seller
Thus this article has discussed various key features of Bitcoin and its working process in a detailed manner.