WHAT IS BITCOIN
- Bitcoin is a digital currency developed in January 2009 following the housing market crash. It follows the ideas set out in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto. The identity of the person or persons who created the technology is still a mystery. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.
- There are no physical bitcoins, only balances kept on a public ledger than everyone has transparent access to, that - along with all Bitcoin transactions is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite it not being legal tender, Bitcoin charts high on popularity, and has triggered the launch of hundreds of other virtual currencies collectively referred to as Altcoins.
UNDERSTANDING BITCOIN
- Bitcoin is a collection of computers, or nodes, that altogether runs the Bitcoin's code and stores its blockchain. A blockchain can be thought of as a collection of blocks. Each block is a collection of transactions. Because all the computers running the blockchain have the same list of blocks and transactions and can transparently see these new blocks being filled with new Bitcoin transactions, no one can cheat the system.
- Anyone, whether they run a Bitcoin "node" or not, can see these transactions occurring live. In order to achieve a nefarious act, a bad actor would need to operate 51% of the computing power that makes up Bitcoin. Bitcoin currently has over 10,000 nodes and this number is growing, making such as attack quite unlikely.
- In the event that an attack was to happen, the Bitcoin nodes, or the people who take part in the Bitcoin network with their computer, would likely fork to a new blockchain making the effort the bad actor put forth to achieve the attack a waste.
- Bitcoin is a type of cryptocurrency. Balances of Bitcoin tokens are kept using public and private "keys", which are long strings of numbers and letters linked through the mathematical encryption algorithm that was used to create them. The public key ( comparable to a bank account number) servers as the address which is published to the world and to which others may send bitcoins.
- The private key ( comparable to an ATM PIN ) is meant to be a guarded secret and only used to authorize Bitcoin transmissions. Bitcoin keys should not be confused with a Bitcoin wallet, which is a physical or digital device which facilitates the trading of Bitcoin and allows users to track ownership of coins. The term "wallet" is a bit misleading, as Bitcoin's decentralized nature means that it is never stored "in" a wallet, but rather decentrally on a blockchain.
- Style notes: according to the official Bitcoin Foundation, the word "Bitcoin" is capitalized in the context of referring to the entity or concept, whereas "bitcoin" is written in the lower case when referring to a quantity of the currency ( e.g. " I traded 20 bitcoin") or the units themselves. The plural form can be either "bitcoin" or "bitcoins." Bitcoins is also commonly abbreviated as "BTC".
How Bitcoin Works
- Bitcoin is one of the digital currencies to use peer-to-peer technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the Bitcoin network, are nodes or miners.
- "Miners", or the people who process the transactions on the blockchain,are motivated by rewards(the release of new bitcoin) and transaction fees paid in bitcoin. These miners can be thought of as the decentralized authority enforcing the credibility of the Bitcoin network. New bitcoin is being released to the miners at a fixed, but periodically declining rate, such that the total supply of bitcoins approaches 21 million.
- Currently, there are roughly 3 million bitcoins which have yet to be mined. In this way, Bitcoin (and any cryptocurrency generated through a similar process) operates differently from fiat currency; in centralized banking systems, currency is released at a rate matching the growth in goods in an attempt to maintain price stability, while a decentralized system like Bitcoin sets the release rate ahead of time and according to an algorithm.
- Bitcoin mining is the process by which bitcoins are released into circulation. Generally, mining requires the solving of computationally difficult puzzles in order to discover a new block, which is added to the blockchain. In contributing to the blockchain, mining adds and verifies transaction records across the network.
- For adding blocks to the blockchain, miners receive a reward in the form of a few bitcoins; the reward is halved every 210,000 blocks. The block reward was 50 new bitcoins in 2009 and is currently 12.5. By around May 11th, 2020 the next halving will occur, bringing the reward for each block discovery down to 6.25 bitcoins.
- A variety of hardware can be used to mine bitcoin but some yield higher rewards than others. Certain computer chips called Application-Specific integrated Circuits ( ASIS) and more advanced processing units like Graphic Processing Units (GPUs) can achieve more rewards. These elaborate mining processors are known as "mining rigs".
- One bitcoin is divisible to eight decimal places (100 millionths of one bitcoin), and this smallest unit is referred to as a Satoshi. If necessary, and if the participating miners accept the change, Bitcoin could eventually be made divisible to even more decimal places.
BITCOIN ROLE IN DARK WEB
- If we want to purchase anything in DARK WEB then we have to pay with the help of bitcoins only. Other than Bitcoins no one can purchase or no one can hire( Hacker's, Assassin, Organised criminals, etc...) any one from DARK WEB.
- People use bitcoins for their transactions because no one track them and in DARK WEB all the illegal things we can buy if we have Bitcoins. Without bitcoin we can't get anything from DARK WEB.
- If any company attacked by Ransomware then hackers ask them to pay ransom in Bitcoins only they don't ask them to pay in the currency notes they ask for Bitcoins only.
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