What is Bitcoin and How It Works?

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What is Bitcoin and How It Works?
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Table Content

• What is Bitcoin?
• Who Controls Bitcoin?
• How Bitcoins Are Created
• How Bitcoin Works?
• How Bitcoin is Different From Traditional
  Currencies?
• Decentralized
• Limited Supply
• Transparent
• Irreversible
• Fast
• How To Get Bitcoin?
• What is Altcoin?
• Use Of Bitcoin

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What is Bitcoin?
What is Bitcoin? Bitcoin is a digital currency
that was created by Satoshi Nakamoto in 2009. It
is a digital currency in the form of electronic
cash which is used and distributed
electronically. Bitcoin is a decentralized
currency that works in a p2p network. It is not
controlled by a single institution or person.
Bitcoin transactions are made with no middlemen.
In 20172018 price-per-coin reached to 20,000.
Today some retailers accept bitcoin for online
transactions.
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Why Bitcoin?
As bitcoin is a digital currency and it was
created as an alternative for decentralized
payment method. Advantage of bitcoin is it
reduces the transfer charges like the banking
sector. Bitcoin can be used to buy merchandise
secretly if both parties agree with the
transaction. Due to bitcoin, international
payments are easy and cheap because bitcoins are
not tied with any country. Many people using
bitcoin only as an investment as it will give
good value to them in the future.
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Who Controls Bitcoin?
The main plus point of bitcoin is independence
from banks, organizations, and Government.
Bitcoin is controlled by all the bitcoin users
who own the bitcoin. Bitcoin is decentralized
cryptocurrency spread over the P2P network and
the control of the system is delegated in
thousands of nodes. No authority interference
into bitcoin transactions and it is totally
transparent so user having total control on their
finance.
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How Bitcoins Are Created?
New bitcoins are generated by the process called
mining. In the mining process, individuals are
rewarded by the network for their services.
Bitcoin miner, a person requires a computer and
mining software like GIUMiner. This program uses
the computers resources to perform complicated
mathematical calculations. When any miner
successfully solves the mathematical problem to
create a new block and received a certain number
of Bitcoin as a reward that is known as Block
reward. New bitcoins are created at a fixed rate
that is why the bitcoin mining process is
competitive. When a new block of a transaction
is formed and verified by the user the whole
block is get added to the digital ledger system
popularly known as Blockchain. No central
database is available to store this information
every individual miner gets notified for the new
block. When more miners join the network, the
more difficult it becomes to make a profit for
each of them.
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How Bitcoins Works?
Bitcoins are the virtual coins so no need to
store and move money. Once you own bitcoins they
are like physical coins. User can see his or her
amount of bitcoin in a wallet and the total scene
handle by the massive public ledger called as a
blockchain. Where all the confirmed transactions
are combined into blocks. Once block enters
into the system it is broadcast to the P2P
network for the validation and it will affect all
the blocks. If any fraud and mistake happen it is
easily spotted and corrected by the user. The
legitimacy of each transaction is protected by
digital signatures corresponding to the sending
addresses. The availability of bitcoins are
limited and bitcoin protocol is designed in such
a way that each block takes about 10 minutes to
mine.
RWaltz Software Pvt.Ltd. 2019
RWaltz Software Pvt.Ltd. 2019
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How Bitcoins Are Created?
New bitcoins are generated by the process called
mining. In the mining process, individuals are
rewarded by the network for their services.
Bitcoin miner, a person requires a computer and
mining software like GIUMiner. This program uses
the computers resources to perform complicated
mathematical calculations. When any miner
successfully solves the mathematical problem to
create a new block and received a certain number
of Bitcoin as a reward that is known as Block
reward. New bitcoins are created at a fixed rate
that is why the bitcoin mining process is
competitive. When a new block of a transaction
is formed and verified by the user the whole
block is get added to the digital ledger system
popularly known as Blockchain. No central
database is available to store this information
every individual miner gets notified for the new
block. When more miners join the network, the
more difficult it becomes to make a profit for
each of them.
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How Bitcoins are Different From Traditional
Currencies
1. Decentralized
2. Limited Supply
The main behind creating the bitcoin is get the
currency free from government authorities and
whatever transactions happen in the network or in
mining every machine and person should know about
that and this is the main characteristics it is
decentralized. No single organization or person
can control the bitcoin network.
As we already know that the fiat currencies like
Euros, INR, dollars have unlimited supply means
the central bank can issue as many as they want.
But with BTC the supply is controlled by an
algorithm. A small number of new bitcoin is
dribbled out every hour and it will continue till
21 Million has been reached and every transaction
takes 10 minutes to complete. In practically if
demand goes still supply is same.
4. Irreversible
3. Transparent
Like traditional payment methods takes place from
the middle man so it is possible to reverse the
transaction but in bitcoin every time it changes
hands and wallet. Once you send your BTC to
anyone there is no way to get them back unless
the recipient would want to send them back to you.
Every single transaction that happens is spread
across the network and get notified to BTC users
and stored in Blockchain. So it is transparent to
everyone.
5. Fast
The payment processed in the bitcoin network
immediately within a few minutes where i9n other
traditional banking systems it will take one day.
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Uses Of Bitcoin
1) Spending Money Privately2) Low-Cost Money
Transfers3) Online exchange4) Shopping 5)
Booking
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Contact Details
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RWaltz Software Pvt.Ltd. 2019
RWaltz Software Pvt.Ltd. 2019