Know About Bitcoin in Simple Language
Currency as we all know is an indistinguishable part of our life. For each and every need of our life, we need currency. In the rock age era, currency was not in trend. At that time people use to exchange items for their needs. For example, if someone is having mango but he needs a banana, in that case, he will exchange mangoes with a banana for another guy. However, this system has many flaws. One of the most common flaws is that you can’t exchange until the other guy wants. So, the birth of currency takes place.
Nowadays we are hearing about cryptocurrency. Bitcoin is the famous cryptocurrency used in the world. Although many cryptocurrencies are now available in the market. Ethereum, Litecoin, Cardano, Dogecoin, etc are some of the famous cryptocurrencies used in the world. But there is a major difference between currencies of the world and cryptocurrency. However, Bitcoin dominance is increasing around the world. Now the world’s famous electric company Tesla has also said that it will soon accept bitcoin as payment for its vehicles. At the same time, Uber company is also moving towards bitcoin. In this article, Know About Bitcoin in Simple Language.
What is Bitcoin?
Started in the year 2019, Bitcoin is a virtual currency. With the advent of time, it has now become a popular virtual currency in the world. It is also called a cryptocurrency because it uses cryptography for payment. That is, now this currency can also be called future currency.
What is Cryptography?
If you want to Know About Bitcoin in Simple Language, you should know about Cryptography. Cryptography is a security method of the network and through this, by encrypting the data in the network, it can be transmitted from one place to another with security. In simple words, we can say that if you want to send private information from one place to another via an online medium, it is sent via cryptography. Two types of functions are performed in cryptography, Encryption, and Decryption.
Encryption is performed while sending data through the sender and Decryption is performed to receive the data on the receiver side. Through encryption, the data sent by the sender is encrypted i.e. the data is converted into code through a Hash algorithm which is in an unreadable format. So that even if the data gets hacked in the network, then it cannot be read.
The data sent in the network through cryptography is provided for Authentication, Access Control, Data Confidentiality, Data Integrity, and Non-repudiation, etc. That is, with the help of cryptography, data can be safely transported from one place to another in the network.
How is the transaction done in Bitcoin?
Transactions for bitcoin require the consumer to send a payment message through a digital medium connected to a private key, which is verified through a decentralized network spread across the world. The payment made through this is unlike the payment done through debit or credit cards. For example, Bitcoin is a ledger in which different persons across the globe are keeping a record of your transactions. Thus it is not controlled by a single institution. Bitcoin Miners use to keep the record of transactions and the miner whose record validates also rewarded by bitcoin. This can be understood in the topic ” Bitcoin Mining”. However, it’s not like that, anyone can add transactions according to their minds. But a valid proof of work should be shown in order to create a blockchain.
Bitcoin is a virtual currency, used only for online transactions. The huge fluctuation in the value of bitcoin often raises the question of whether it is capable of functioning as a currency. Since it is not backed by a central bank, it is exchanged privately. It is generated through a process called ‘mining, which requires a special kind of software, better processors, and an uninterrupted power backup supply.
Is Bitcoin Safe?
Although Bitcoin building is quite safe, still investing in cryptocurrency is very risky and is highly volatile. The value of Bitcoin fluctuates heavily. So, trading in Bitcoin can be on the risky side. Also, in case you lose your wallet password or the file has been deleted from the server by mistake, your money will be lost forever.
Founder, Upgrading India
You really made this easy to understand