Bitcoin Definition And How Its Work

The Definition of Bitcoin Is an easy payment tool that can be used all over the world and across the continent.

Bitcoin currency is not known in the banking system and is not related to the government. Then why today is bitcoin very popular?
WannaCry Ransomware Hacker Requesting Bitcoin

Some time ago, the world was thrown with a WannaCry Ransomware Malware attack that attacked computers with the Windows operating system.

Reporting from Liputan6.com sources, Ransomware WannaCry malware has attacked more than 300 thousand computers worldwide by encrypting data, so the data can not be accessed by the owner.

Instead of asking for a ransom of cash or precious metals, Wannabe's Ransomware Hacker requested a bitcoin ransom, worth $600

The question arises: Why Bitcoin? Why not cash or precious metals? What is bitcoin and what are the advantages?

To answer all of these questions, My finances will outline the bitcoin and what are the advantages over cash or precious metals and other means of transmission.


Definition of Bitcoin

Bitcoin is a means of payment created by a group of programmers who are on behalf of themselves as Satoshi Nakamoto in 2009.

Touted as the first digital currency in the world.

Bitcoin becomes a cryptocurrency whose exchange system is not managed by an operator but is done with a peer-to-peer system aka done directly between individuals without intermediaries.

Bitcoin currency is not listed in the banking system and is not related to the government and all its exchanges are recorded in a distributed ledger called blockchain.

Bitcoin is often used for private transactions that are not anonymous (anonymous transactions) that can be used for illegal transactions, such as the sale and purchase of drugs.

Based on a study conducted by Cambridge University in 2017, there are 2.9 to 5.8 million cryptocurrency users, with the majority using bitcoins.

On August 1, 2017, bitcoin was split into two types of digital currencies, namely Bitcoin Classic (BTC) and Bitcoin Cash (BCH).



How Bitcoin Works

Since its first launch in 2009, bitcoin has no physical form or physical denomination. Bitcoin exists only as information within a network of interconnected computers.

As previously disclosed, all bitcoin transactions are recorded in blockchain so to create Bitcoin, one must create blocks within the network.

Each block is created cryptographically by binding the user's computer power which is then added to the blockchain, making the user acquire it by running the network

The bitcoin manufacture limit is embedded in the system and the maximum number is below 21 million bitcoins. There are currently 15 million bitcoins worth over US $ 4,000.

Some people consider bitcoin as an investment, hoping its value will continue to rise.

You can also buy bitcoin in a marketplace that provides Bitcoin Exchange. For example, the largest bitcoin exchange place is Mt. Gox.

Bitcoin can then be transferred to other users using the smartphone app or with a computer. Like transferring money digitally.

Bitcoin will be stored in a digital wallet, which is available on the user's computer. A digital wallet is like a virtual bank account that allows users to save, send and receive, and use bitcoin for sale and purchase.

What Affects Bitcoin Prices?

Bitcoin prices always fluctuate like precious metals or stocks, since the public is known in 2013. Many are wondering what causes these bitcoin price fluctuations.

Bitcoin prices tend to rise but had plunged into very low due to the fall of the largest bitcoin exchange place, namely Mt. Gox.

After that, the bitcoin price slowly creeps up as demand grows.

Given the many financial experts who think that bitcoin is now starting its glory era.

Excess Bitcoin

Then why do people often idolize bitcoin rather than other means of exchange?

What are the advantages compared to cash, precious metals, and others?



# 1 Easy Exchange Tool

The easy meaning here does not mean easy to create or obtain, but easy to transact.

That is, you can easily spend bitcoins.

Why is that? Because bitcoin is very popular among internet users and is accepted as a digital currency.



# 2 Anonymous

Although all the transactions are captured in the blockchain, the name of the buyer and seller of bitcoin can never be known by anyone. All that can be known is the wallet ID alone.


# 3 Difficult to Track

Due to the secret and anonymous nature of the transaction, bitcoin is one of the most difficult means of traceability of the circulation.

Therefore, many who use this one exchange tool for illegal sale and purchase.

# 4 The amount is Limited

As noted earlier, after reaching 21 million bitcoins, there will be no more bitcoins to be generated. With limited supply, it is clear that there will be scarcity in this digital exchange tool.

With the scarcity, the bitcoin price is forecasted to continue rising, given the large demand with limited supply.

Should I Invest in Bitcoin as well?

In addition to being decentralized, bitcoin is also free of any transaction fees or other fees. In contrast to most other types of investment that accompanied the frills of this cost it.

Over the past 7 years, bitcoin prices have gone up by 35,500 times and the trend in recent years is up and down tend to rise.

You can decide whether or not to invest bitcoin weigh some of the advantages and information gained from this article.