BlockChain And Bitcoin Introduction

BLOCKCHAIN

Nowadays, modern technology allows people to share the information very easily. If any individual wants to share a picture, video or a text message to another individual. But when it comes to money, people have to trust a third party to complete a transaction between them.

For example, If A wants to send some money to B, a third party like bank or government can do a transaction because both A and B are trusting, this trust gives central authority over them. The third party will get some percentage according to their transaction that has been made by A and B and it leads to some money deduction from their original payments. So, to overcome this problem we are using a technology called blockchain. Blockchain uses a concept of decentralized distributed public databases;  i.e., without having a central authority over a transaction that costs money. So, it's done without trusting a middle authority to transact with us. So for that, it uses a decentralized public digital ledger that is used to save transaction details in a digital ledger. Technically, a blockchain is a distributed database that is used to maintain a list of records in a node called as a block. So, each block interconnects within themselves, each and every pair of a block is connected by timestamp.

The blockchain comes with the concept of the decentralized distributed system. To achieve this, blockchain uses decentralized public digital ledger that is used to save transaction details in a digital ledger. Ledger is an account notebook to record transaction details of the user in the bank. Likewise, here we are going to use Digital ledger to store the transaction detail of the particular user in an open decentralised system, not only decentralised but distributed.

Here, each and every user has the shared copy of the details in their ledger, if a hacker wants to change the information or a property in a block, it won't get updated, since everyone in the block has a shared copy of transaction details, the whole bunch of users has to authenticate it, so a single user can't change the data without knowing others involved in this property change. Every user has a Cryptographic hash method called digital signatures to send, to receive, to update the record in a block, for every transaction these signatures will change. Only the user can know these changes.

BitCoin (Brief History)

The first blockchain was conceptualized by a pseudonym Satoshi Nakamoto in October 2008 and in the following year crypto-currency "Bitcoin" was introduced. Bitcoin is the first blockchain application. The blockchain databases are managed autonomously by using p2p (Peer to Peer) technology and timestamp server. The invention of the blockchain for Bitcoin made it the first digital currency to get rid of the double-spending problem without requiring a trusted administrator or central authority. Bitcoins are the first decentralized digital currency which is sent through the internet. It is also known as virtual currency, digital currency, crypto-currency.

The first application of Blockchain

It is a digital payment system that uses peer to peer transactions by the users directly in a distributed public ledger. These transactions are verified by network nodes and recorded in a public distributed ledger as said earlier, known as blockchain. Since the system works without a central repository or single administrator, Bitcoin is called the first decentralized digital currency.

And some of the alternatives of bitcoins are Litecoin, Ripple, Primecoin, Namecoin, Dogecoin etc…But, Bitcoin is the most trustworthy and most applicable cryptocurrency nowadays.

Link to the original file created by Nakamoto- Bitcoin p2p electronic cash system

As per the date, the one Bitcoin value = ₹280855.19 or $4300.32.

To earn Bitcoin, first of all, you want a digital wallet to store a bitcoin. A Wallet can be the app (mobile version) or website (Desktop version).

e.g. Coinbase, Electrum, Armory, unocoin (India). These are some websites that providing Bitcoin wallet.

There are several ways to earn a bitcoin. Those are,

  • By accepting as a payment.
  • By changing our real money to Bitcoin by uploading our bank balance to the wallet.
  • By Mining (Doing a math calculation for blockchain entries).
  • Rewards by playing Games.
  • By request our friends through Wallet.
  • By getting Tips (using QR code like Paytm).

You can buy any physical goods using bitcoins. However, a Bitcoin plays the same role as real(physical) money, but with a higher responsibility.

Bitcoins are accepted wherever you find "Bitcoin accepted here" sign in any e-commerce site or a retail store. Nowadays, there are many commercial sites that are accepting Bitcoin as payment.

If you want to see how a digital currency looks, a digital currency doesn't really exist! You cannot point to a physical object or digital file and say "It is a Bitcoin". Because there is the only record of the transaction between different addresses and those are placed in a public ledger. By only seeing the balance you can tell that the user has a certain amount of bitcoins. Blockchain technology was created as the system for running Bitcoin and other cryptocurrencies but it was not only for Bitcoin application, it is far behind that, some of them are smart contracts, distributed cloud storage, decentralised notary, Digital Voting etc…

But, Bitcoin was the first application which uses blockchain technology and becomes more popular, because it was based upon economic crisis.

The Blockchain technology is going to play a significant role in the economic crisis. However, the future of finance and open-source technology could be dominated by blockchain technologies.

Future of Bitcoin

A traceable global currency(public) with an efficient infrastructure (blockchain) will not only result in massive cost deduction for all market participants, it will change the global banking system.

"Bitcoin will do for payments what email did for communication"

Source (Future of Bitcoin)

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