What is Bitcoin? Complete Information

What is Bitcoin?

Bitcoin is a type of digital money that you can use to buy things or trade with other people without using physical coins or bills. It’s like having virtual money that you can store in a special digital wallet on your computer or smartphone.

What makes Bitcoin special is that it’s not controlled by any government or organization. It’s based on something called “blockchain technology,” which is like a big, secure online ledger that keeps track of all the Bitcoin transactions.

Instead of having a bank or a central authority keeping track of who has how much money, the Bitcoin network is run by a community of people who use their computers to process and verify transactions. This process is called “mining.”

There is a limited amount of Bitcoin that can ever exist, which makes it different from regular money that can be printed by governments. This limited supply helps make Bitcoin valuable, just like rare collectibles.
People can buy Bitcoin using regular money, and they can also sell or trade it. Some people think of Bitcoin as a kind of investment, hoping that its value will go up over time.

It’s important to note that Bitcoin can be quite complex, and there are many more details to understand as you learn more about it. But this is a basic explanation to help you understand the concept.

Who Created Bitcoin?

Bitcoin was created by someone named Satoshi Nakamoto, but nobody knows who that person really is. It’s like a secret identity! Satoshi Nakamoto wrote a special paper that explained how Bitcoin works, and then they made the first Bitcoin software.

Think of it like inventing a new game. Satoshi Nakamoto created the rules and made the first set of game pieces (Bitcoins). But instead of a physical game, it’s a special kind of money that exists on computers.

Even though we don’t know who Satoshi Nakamoto is, their invention changed the way people think about money and how we can use it online. It’s like a big mystery that people are still trying to solve!

The question in your mind is Who controls Bitcoin?

No one person or organization controls Bitcoin. It’s like a big, digital community where everyone works together. Remember the game we talked about earlier? Well, instead of having a boss or a leader, Bitcoin is run by lots of people who have computers.

These people help make sure that all the transactions are fair and secure. They use their computers to solve puzzles and verify the transactions. This process is called “mining.” When they solve a puzzle, they get rewarded with some Bitcoin.

So, you can say that Bitcoin is controlled by the people who use it. They all have a say in how it works, and they work together to make sure everything is done fairly and safely. It’s like a big team effort!

Characteristics of Bitcoin:

A bitcoin user sees the only amount of Bitcoins on his/her wallet and its transaction results. 

1. Blockchain: 

Bitcoin is based on Blockchain technology. The Bitcoin blockchain is a public ledger that keeps all the records of Bitcoin transactions. It is implemented as a chain of blocks, each block containing a hash of the previous block up to the chain’s genesis block. A network of communicating nodes running Bitcoin software maintains the Blockchain.

2. Secure:

Bitcoin funds are locked in a public key cryptography system. Only the owner of the private key can send Bitcoin. Strong cryptography and the big numbers make it impossible to break this coding. A Bitcoin address is more secure than bank security.

3. Anonymous:

The bank knows everything about their clients essentially the Account name, address, mobile number, credit history, and so on.

But in Bitcoin, all are different. Neither transactions nor accounts are connected to the real identities of the person. You receive Bitcoins on Bitcoin addresses, which are randomly coded in the hash of around 30 characters. Some people don’t want their finances to be governed or tracked by any kind of authority, activities like terrorism, hacking, drug supply, or other illegal activities.

4. Transparent:

 A single Bitcoin transaction that ever happened is stored in the Blockchain. Any transaction did your wallet address, and anyone can tell how much bitcoin is in it by examining the blockchain ledger. However, we can easily check all the transaction details of the particular Bitcoin address openly. Those people who want to stay anonymous with their transactions have advantages. 

5. Fast and Globally: 

The Bitcoin payment completes instantly in the network and is confirmed in a few minutes or sometimes in a few seconds. You can send Bitcoin to anyone across the world. In comparison, a standard bank transfer can take up to several days. 

6. Charges:

The Bitcoin transfer charges are negligible. While transacting through a bank takes a long time and fees comparable to Bitcoin to reach the recipient.

Cryptocurrencies can’t be recalled

The main difficulty is once you send your Bitcoins to the wrong wallet address, after confirmation, there is no way of getting them back unless the recipient would want to send them back to you. So check the recipient’s address of payment carefully. When it comes to traditional currencies, most transactions can be recalled, as all it takes is one visit to the bank.

Is Bitcoin legal?

In many government authorities, Bitcoin and other cryptocurrencies are still in the legal or in a grey area as it’s becoming more and more popular, law agencies, tax authorities, and legal regulators all over the world are trying to understand the concept of cryptocurrency and where exactly does it fit in existing regulations and legal frameworks.

The legal status of Bitcoin depends on, where you are in the world, and what you’re doing with it. Here’s our guide on legal issues concerning Bitcoin. Bitcoin is not getting legal tender status in most countries, but some countries’ tax authorities have acknowledged its significance and proposed specific regulations. So many countries observe Bitcoin as Bitcoin is a relatively new currency, and the regulations and frameworks governing its taxation significantly differ depending on the country.

For example, the United States tax service treats Bitcoin and all other prominent digital currencies as property rather than currency. Every taxpayer selling goods and services for Bitcoins has to include the value of the received Bitcoins in their annual tax returns. Miners are also subject to U.S. taxation, but only if the mining proves to be successful.

Is Bitcoin is Safe Investment

After getting so much research on Bitcoin, we find that Bitcoin is a highly risky and high-returning investment. Understand one thing, any investment that has more than 50% or more fluctuation in a day is not a safe investment. Investing in something that we cannot influence then it is the blind trick of not seeing anything that is going to happen. so invest that amount in Bitcoin that you can afford to lose. 

Is Bitcoin a bubble?

Robert Shiller, a Nobel Prize-winning economist, proposed a strategy that helps determine if something is a bubble. Said definite increases in an asset’s price, surpassing public excitement, media craze, stories of people getting rich, and growing interest in the global public’s asset. Bitcoin checks all of the cases. So, in a way, Bitcoin is a bubble or not, and it has burst before.

In the year 2018, there was a massive sell-off pressure from January 2018 to February 2018 the bitcoin price remains at half, while in some countries, it goes down about 70-80% because of its regulation. Many countries started to take strict action against money laundering in Bitcoin. Not the Bitcoin goes down, but also, other cryptocurrency goes about 80-90% down. So we can say 2018 is a bad year for all cryptocurrency users. Now Bitcoin again going up and breaking all the records.