Bitcoin can be described in simplified terms such as a virtual currency or digital currency, with no physical presence. It is also termed as cryptocurrency. It is an online or digital version of money. You can use it to shop for products or services, and you can use it to buy or sell anything. However, blockchain technology are slowly gaining popularity since 2009. It was the year of the invention of bitcoin by Satoshi Nakamoto.
Over the years, Bitcoin has witnessed not only popularity but increasing value as well. As described by the creator of Bitcoin, this electronic payment system encrypted with cryptographic proof is rapidly bagging popularity worldwide. However, one of the most common uses of Bitcoin today is as a mode of investment. Investors buy Bitcoin and keep it on hold until its value increases. However, traders use Bitcoin for business purposes and payments. The acceptance of this cryptocurrency is growing steadily,for example, the online payment service PayPal has recently announced that they are introducing Bitcoin transactions. This is the reason why people are also gaining trust over the legit cryptocurrency trading platform. Using Bitcoin, you sell, buy, or exchange services and goods without any bank, or finance authority being an intermediary.
Bitcoin to bitcoin transactions
When a person sells or buys or makes transactions of a business in the Bitcoin mode, no cash is involved there, rather it is a digital exchange ofcomplex encrypted codes within a peer-to-peer (P2P) network. The P2P network handles and manages all transactions made between users and keeps the record. Just like you store coins in your wallet, bitcoins can be stored in a digital wallet which is a software program. Each bitcoin user has his private key, and you can access your digital wallet and access records of all transactions with the help of it.
Bitcoin Working Simplified
To understand the bitcoin concept, you may consider it as a computer file stored in a digital wallet app, which can be accessed from any smartphone or computer.
As a trader, when you purchase or sell anything with bitcoins, each transaction is immediately recorded by a public ledger in a public list which is termed as blockchain. The blockchain allows you to keep complete track of bitcoins exchanges made worldwide, to stop essential wrong transactions, restrict people from attempting to spend bitcoins that they do not own, etc.
To keep a strategic record of all bitcoin transactions, public ledgers record all cryptocurrency businesses being held every minute throughout the world. These recordings are made through specific spare servers, which can be set up by anyone. These recording nodal points are termed nodes. In this system, no central source of trust works like a bank or so, instead, a statistical database is maintained through these nodes throughout the world and records of who owns which coins as per cryptographical codes.
All transactions made are publicly broadcasted throughout the P2P network and all data are shared amongst all the nodes. In every few minutes, all transaction records are collected and formatted by miners and segregated into blocks, and added into the blockchain. Thus, the accounts of bitcoin transactions are maintained through these blockchains.
Bitcoin to Cash
Bitcoin is a digital asset. Just like any other asset one can possess, bitcoins can also be converted to cash or exchanged against cash. Platforms for exchanging bitcoin and other cryptocurrencies allows seamless conversions and transactions of bitcoins. Moreover, multiple small-scale to midscale businesses are also coming ahead and accepting bitcoins, which has increased the scope for increasing valuation of bitcoins.
What is the purpose of bitcoin?
Bitcoin or cryptocurrency is almost like a traditional currency system with existence only in the digital world. This currency system enhances the ease of online transactions and digital payment methods without involving a central body of authority. This is nowadays rather working as an alternative method of payment over normal modes of payments. The reliability of bitcoin exchanges has also increased based on secured transactions, strategic recording of cryptocurrency ownership. Therefore, the future ahead has a bright prospect waiting for this digital currency system. You can enter business, and profit or gain from the cryptocurrency investment and build your fortune.