There are thousands of cryptocurrencies, and Bitcoin is the most widely recognized crypto.
The reason Bitcoin is popular is that it facilitates peer-to-peer value exchange in the digital world via a decentralised protocol, cryptography, and a technique to reach a global agreement on the status of a regularly updated public transaction ledger called a 'blockchain.'
Bitcoin is a currency that exists independently without the support of any government, private firms or financial institutions.
Several centralised intermediaries approve your transactions for transferring FIAT money globally.
But when you are transacting through Bitcoin, no single centralized intermediatory has the power to approve or deny any of your transactions.
If you are a newbie in the crypto world, this blog post is what you need to go through to know the A to Z of Bitcoin and how Bitcoin works.
History of Bitcoin:
There is a huge mystery behind the creator of Bitcoin. The assumed pseudonym for the unknown Bitcoin developer is Satoshi Nakamoto.
While considerable debate surrounds the identity of Bitcoin's developer, no one knows for sure who established the world's first and most widely used cryptocurrency. The domain name Bitcoin.org was registered on 18 August 2008.
Two months later, on the 31st of October 2008, "I've been working on a new electronic payment system that's totally peer-to-peer, with no trusted third party," a person or group named Satoshi Nakamoto announced to the Cryptography Mailing List at metzdowd.com.
This now-famous white paper, titled "Bitcoin: A Peer-to-Peer Electronic Cash System," published on Bitcoin.org, would become the Magna Carta for how Bitcoin functions today.
The first Bitcoin block was mined on 3rd January 2009 it is also called the genesis block, and it contains the following text “The Times 03/Jan/2009 Chancellor on the brink of second bailout for banks”.
It was just 5 days after the first mining of Bitcoin, that the first version of Bitcoin software was launched.
How does Bitcoin work:
The Bitcoin system works on a network of computers (also known as "nodes" or "miners") that all execute Bitcoin's code and store its blockchain. A blockchain may be seen metaphorically as a collection of blocks.
Each block contains a set of transactions.
No one can trick the system since all of the blockchain's machines have the same list of blocks and transactions and can observe these new blocks as they're filled with recent Bitcoin transactions.
Benefits of Bitcoin:
The Bitcoin network is not controlled or owned by anybody.
Instead, the network is made up of consenting individuals who follow the rules of a protocol.
Changes to the protocol must be approved by the protocol's users, and there is a diverse range of contributing voices, including 'nodes,' end users, developers, 'miners,' and adjacent industry participants such as exchanges, wallet providers, and custodians.
Bitcoin is a quasi-political system and perhaps the most decentralised of the hundreds of cryptocurrencies in existence.
As per the protocol's principles, the addition of new transactions to the blockchain record and the status of the Bitcoin network at any given moment is reached by agreement and transparently.
In Bitcoin, there are no gatekeepers.
The network confirms all transactions that adhere to the protocol's requirements using the established consensus procedures.
Bitcoin transactions are recorded and made public for all to see.
While this essentially eliminates fraudulent transactions, it also allows individual identities to be linked to specific Bitcoin addresses in some situations.