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What is bitcoin and how does it work?

what is bitcoin ? 

Bitcoin is a cryptocurrency invented by an unknown person or group of people known as Satoshi Nakamoto in 2008. The currency came into use in 2009 when its application was released as open source software.

What is bitcoin and how does it work?

Bitcoin is the first decentralized digital currency, without a central bank, that can be sent from one person to another over the Bitcoin network on a peer-to-peer basis without the need for a third party (intermediary such as banks). They are verified using cryptography and recorded in a distributed ledger called a blockchain. Bitcoin is created as a reward for a process known as mining. It can be exchanged for other currencies, products and services. Research by the University of Cambridge indicates that in 2017, there were between 2.9 and 5.8 million users using a cryptocurrency wallet, most of whom own bitcoin.

Bitcoin has been criticized for the potential for illegal transactions, the large amount of electricity used in mining to produce new bitcoins, exchange rate fluctuations, and bitcoin exchange hacks. Some economists have described it as a "speculative bubble".

The Bitcoin network has been in operation since 2009 and has not stopped since then, and due to the coin compatibility system, no one has been able to hack the Bitcoin blockchain, and most of the hacks are caused by human error. In portfolio management and not because of design flaws.

Bitcoin in general with other currencies 

Bitcoin is a cryptocurrency, that is, it is based mainly on the principles of cryptography in all its aspects, and it is the first currency of its kind, the most famous and widespread, but although it is not

Bitcoin in general with other currencies

the only cryptocurrency . on the Internet today. There are a lot of cryptocurrencies today but 6 of them can be classified as major, depending on the number of users and the structure of each network, as well as the places where these cryptocurrencies can be exchanged and bought. Other currencies All cryptocurrencies today are based on the same principle as Bitcoin, except for Ripple, and since Bitcoin is open source, it is possible to clone it, make some modifications to it, and then launch a new currency.In a way, the rest of the digital currencies are created from the source, which is Bitcoin. Which is the origin of all digital currencies

Bitcoin and its relationship to the blockchain

The world's largest open and distributed digital registry, which allows the transfer of ownership origin from one party to another at the same time, without the need for an intermediary, thus achieving a high

Bitcoin and its relationship to the blockchain

degree of security of the transfer process against fraud. or manipulation attempts, and all people around the world participate in this recording

To ensure the accuracy of transfers, the Bitcoin system keeps a log in which all actions on the network are recorded, called the blockchain. This record is shared by all nodes of the Bitcoin network through a system based on the Bitcoin protocol. The block chain contains all the actions that are performed with Bitcoin, which allows us to know the balance that each address in this network contains. This concept is called a chain description of the interconnection between blocks, where each block contains the hash of the block that precedes it, and the question continues until the first block is reached, which is called the "configuration block". Setting the chain in this way makes the task of changing any block after a certain period of time very difficult, because changing any block requires changing all subsequent blocks due to the need to recalculate the hash of each block. block. Block to update the hash value of the previous block in it. It is this feature that makes the problem of repeated spending of the same coins so difficult for Bitcoin, and even the blockchain can be considered the backbone without which Bitcoin cannot sustain itself.

The concept of decentralization and its relationship to the Bitcoin network

Decentralization  is the process by which the activities of the organization, especially those related to planning and decision-making, are distributed or delegated away from a reliable central location or group.

Concepts of decentralization have been applied to group dynamics and management sciences in companies and private enterprises, political science, law and public administration, economics, money and technology.

The concept of decentralization and its relationship to the Bitcoin network

Bitcoin is an anonymous digital currency, because the transfer process through it requires only knowledge of the wallet number of the person to whom it is transferred, and the transfer is stored in the blockchain with a special serial number. . This does not include the name of the sender or recipient or any other proprietary data, making it a general idea for all privacy advocates or sellers of illegal goods (such as drugs) online.

Bitcoin is based on financial transactions and uses peer-to-peer network, electronic signature and encryption between two people directly without an intermediary body regulating these transactions, funds move from one user account to another instantly and without any kind of commission in exchange for a transfer. (excluding network fees paid to miners) and without going through any bank or intermediary body of any kind.

The currency is available all over the world and you don't need complicated requirements or things to use it. When you get the currency, it is stored in an electronic wallet. This currency can be used for many things, even to buy books, gifts or things that can be bought online and converted into other currencies like dollars or euros.

What is a bitcoin wallet and how does it work?

A Bitcoin wallet is a type of digital wallet that is used to send and receive bitcoins. The wallet stores cryptographic information used to access Bitcoin addresses and send transactions. Some bitcoin wallets can also be used for other cryptocurrencies.

What is a bitcoin wallet and how does it work?

A Bitcoin wallet is similar to a personal, confidential and secure bank account and differs from one bank to another, but the goal is the same, which is to maintain your personal Bitcoin balance. The wallet address consists of an encrypted combination of letters and numbers to receive Bitcoin when buying this currency.

The main types are 

  • desktop wallets
  •  mobile wallets
  • web wallets
  •  hardware wallets.

Acceptance of Bitcoin and some of its uses

Although there is a relatively limited group of sites that accept bitcoin payments for their products, compared to sites that deal in traditional currencies, bitcoin is supported by a growing group of sites,

Acceptance of Bitcoin and some of its uses

including companies and sites as large and diverse as websites. Who sell hosting services. And booking domain name, social networks, videos, music, and various websites selling different types of products.

In addition to purchasing products, the user can exchange existing bitcoins for other real currencies. This exchange occurs between the same users who want to sell Bitcoin and buy real currencies for it or vice versa, so Bitcoin has its own exchange rate, and this price exceeded in the year 2021 60 thousand dollars today, after it was a few dollars a few years ago.

Germany is the only country that has officially recognized Bitcoin as a form of electronic money, so the German government considered that it could tax the profits made by companies that trade with "Bitcoin", while individual financial transactions are exempt. of taxes

A US federal judge recently ruled that Bitcoin is a currency and a type of cash, and may be subject to government regulation, but the US has yet to officially recognize the currency.

Some believe that official recognition has a positive aspect, which is the further legalization of the currency, while others believe that this may open the door to further regulation of the currency and its linkage with governments, and this is incompatible with a of the advantages of Bitcoin. As a currency not tied to anywhere.

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