Bitcoins: Know all about Cryptocurrency

Published by: Haleel Abdul Hameed

Bitcoins !! Definitely a familiar term for us. People mostly know it as Cryptocurrency or Internet currency. We all heard about this quite a long ago and recently there is a big boom among the technocrats. I have seen most of my techie friends start building enterprise apps for bitcoins. So why is there so much big chaos revolving around these digital currencies? Everyone looks forward to investing in these bitcoins. This is because they claim that it would be a big success shortly, it's going to change the face of currency and the economy in lot many aspects.

Understanding the concept of Bitcoin is quite a tedious and ambiguous one. Trust me, I have started to read a lot more articles in Quora and other social blogs about bitcoins. My Knowledge trail in this research has been fairly exciting. 

What are Bitcoins?

After reading and researching about bitcoins, Here’s a summary of Bitcoins.

• Bitcoin is an open technology, where we would be able to transfer money peer to peer without any interference from any third party banks.
• It was started by a person named - Satoshi Nakamoto in 2008.
• Technocrats such as Microsoft are claiming Bitcoin would be the next evolution of currency.

Trust me when I got the whole picture of bitcoins, I was in a big dilemma to use it right away and I thought it was an amazing evolution trend.

In order to understand this, I started to unravel the path of Bitcoin as a newbie. As a newbie would do, I started with the foundations of Bitcoin ideology.

The Science Behind Bitcoin

If you have a friend in the USA and you live in India, you are willing to send a small amount of money say about $10.

Okay now! If you are planning to do online transactions via banks, there are a few cons such as,

• They charge you an extra amount for transnational charges.
• There goes a lot many compilations and checks, which delay in reaching the process. 

We all have faced this before, we were so lazy started to live with the fact. But Satoshi Nakamoto started to think a bit differently he came up with this concept.

In October 2008, Nakamoto published a paper on The Cryptography Mailing list at metzdowd.com describing the Bitcoin digital currency. It was titled Bitcoin: A Peer-to-Peer Electronic Cash System. 

In January 2009, Nakamoto released the first Bitcoin software that launched the network and the first units of the Bitcoin cryptocurrency, called bitcoins. Satoshi Nakamoto released the Version 0.1 of Bitcoin software on Sourceforge on 9 January 2009. Since we are involved in many web development projects that are created from scratch, the idea of Bitcoin software caught my eye. 

The Present Situation of Bitcoins

After a while, it became a quite big viral trend among marketers and entrepreneurs. They started to empathize over this digital currency and the trend to become bigger and bigger in the upcoming days.

Great now we know Bitcoin history, you still don't have an idea What is Bitcoins right? Yeah, I had the same problem correlating the same.

So let's take a deep dive once again.

Bitcoins are the digital currency that is used for peer transactions. Using the bitcoins you would be able to buy products from online and offline stores if they gonna support bitcoin currency.

Bitcoins work quite differently as compared with the normal currency transaction when you take normal currency transactions.

How do Bitcoins process?

They would go to the bank and after a few checks and compilation of various other banks. As a result, they would charge you a few extra bucks for every international transaction, people are not willing to spend a few more bucks on international transactions and it takes a lot of time for the amount of credit to the receiver side.

Now the same case with bitcoins, this is how it would work. As a sender, I would be using my Bitcoin wallet to send Bitcoin to the receiver using his or her Bitcoin address. Within seconds the bitcoins are received by the receiver. Now he can go to the Bitcoin exchange center for exchanging for real currency or use Bitcoin for buying things around.

If you would observe here, they were no banks involved. It just involves the two peers transacting money directly using the internet as the common medium.

Interesting right? You would have many different questions now; let me explain you one by one.

How do these Bitcoin transactions work?

Bitcoins are transferred through the Internet, right? So the receiver and sender would have these things:

• Bitcoin wallets
• Bitcoin address

This is how it's gonna work! You need a Bitcoin wallet, they are plenty of service providers in the App Store and Play Store.

1. As a Bitcoin Sender

Register an account and verify the account

You need to purchase bitcoins using a Bitcoin exchange provider in your country

You need to enter the details for whom you are willing to send

(Name, Bitcoin address, and your private key to authenticate the transmission)

2. As a Bitcoin Buyer

Register an account and verify the account

Tap on the received payment (the menu might vary depending on the various apps)

Role of Bitcoin Miners in Transactions

They are processed by bitcoin miners, they are professionals who are helping to authenticate your transactions. While you make it, let me remind you every Bitcoin transactions are visible in the Bitcoin miner.

As a Bitcoin miner, I would be authenticating every transaction in the Bitcoin network. I would be showing your account details and transactions through strong encryption. In return, I would be getting a Bitcoin.

So this is how Bitcoin works! it's just a proof of concept helping people with the digital currency. Well, on the other hand, they have evolved into various dimensions of digital currency. Several online stores started to accept the same.

Hope you have got an idea about this In case you have to learn more about high-earning websites, do feel free to talk to our experts.