Since a few months, you often hear about Bitcoin and cryptocurrency. You already know that you can make money buying and selling Bitcoin, but you do not really know what it is or how it works. This is the moment to know everything about cryptocurrency, from its creation to today.
The term Bitcoin is the assembly of two words of English origin: bit (the unit of binary data) and coin (currency in the language of Shakespeare). The virtual currency was mentioned for the first time in 2008 by an individual who calls himself Satoshi Nakamoto . This is a pseudonym. We do not yet know who we really need the appearance of Bitcoin. According to rumors, it is Elon Musk who would be the true inventor of cryptocurrency but it is unlikely.
Anyway, this mysterious Satoshi Nakamoto is today one of the biggest fortunes in the world. According to Forbes’ latest ranking, the person, or group of people, who is behind this pseudonym, is one of the 50 richest individuals in the world. It is estimated that Satoshi Nakamoto would now own $ 19.4 billion, or 980,000 Bitcoins.
Bitcoin: what is a cryptocurrency?
Bitcoin does not work like the Euro, the Dollar or the British Pound, it is a virtual cryptocurrency. Bitcoin is a virtual currency unit that does not depend on any authority or financial institution. No centralized organization therefore regulates cryptocurrency. It was the declared goal of Satoshi Nakamoto when he created Bitcoin: to escape financial institutions and offer a fully independent currency. In this way, it is impossible to devalue a virtual currency.
If Bitcoin is not regulated by any institution and by any bank, the virtual currency does not escape certain rules. In the absence of authority to regulate Bitcoin, its value is in fact entirely determined by the law of supply and demand. This is why his course is also variable. But that’s also why it’s possible to make huge gains in just a few hours. Alternatively you can use Bitcoin Cash ABC.
One might think that transactions with Bitcoin are out of control. This is not the case. To ensure the safety of its users, the creators of Bitcoin invented Blockchain technology. What is that ? The Blockchain is at the heart of the very principle of Bitcoin. It is thanks to this innovation that cryptocurrency has a future. Without Blockchain, Bitcoin would lose all credibility.
The Blockchain, or chain of blocks in French, is the technology that allows to store and transmit information in a totally transparent and 100% secure way. As explained in the diagram below, the Blockchain is a huge database of all transactions made by its users. When two people exchange Bitcoin via the Blockchain, their transaction is encrypted on the Blockchain network and locked.
This transaction is called “block”. The blockchain consists of all the transactions, and therefore all the blocks designed by the users. Other users do not have access to this block and can not modify its content. As you can see, other people in the Blockchain can not get hold of your Bitcoins. Why ? If cryptocurrency escapes all control of an official body, such as a bank, Bitcoin does not evolve in an anarchic universe without faith or law. Alternatively you can use Bitcoin Cash ABC.
It is all active developers of the Blockchain network who validate and guarantee each exchange. In order for an individual to modify a blockchain, he needs the approval of all other members of the Blockchain, which is impossible. If the authority is decentralized, it is not non-existent. Similarly, the Blockchain is not stored on single servers but on all computers on the network. Each user therefore stores part of the blockchain on his device. The exact functioning of the Blockchain is quite difficult to grasp but here are the general principles.