Bitcoin: A Peer to Peer Electronic Cash system


Bitcoin: A Peer to Peer Electronic Cash system

By:Mahtab Alam Quddusi

Bitcoin is a cryptocurrency, a form of electronic cash and an innovative payment network and a new type of money. This is the first decentralized digital currency, in fact, bitcoin is completely virtual coins that are designed to be self-contained for their value, banks do not need to move and store. Once you are the owner of Bitcoins, they behave like physical gold coins: they have value and business just as if they were nuggets in their pockets. You can use your bitcoin to buy goods and services online, or you can remove them and hope that their value will increase in years.


Bitcoin
Bitcoin

What is Bitcoin?

Bitcoin is a cryptocurrency, a form of electronic cash and an innovative payment network and a new type of money. It is the first decentralized digital currency that was designed to do transactional work without the central bank or an administrator interference. Bitcoin is trading from personal wallet to second. The wallet is a small personal database that you store on your computer drive, on your smartphone, on your tablet or anywhere in the cloud.
Bitcoin uses peer-to-peer technology to work with a central authority or bank; The management of transactions and the introduction of bitcoin is done collectively by the network. Use of Bitcoin is free open for everyone;  nobody owns and has the total right to control bitcoins, and everyone can participate in it. Although most transactions are done through the cryptocurrency exchange market. Transactions through the network nodes are verified through the revolution and are recorded in a public distributed account called a block distributed or blockchain. Bitcoin was first proposed and then designed by a person named Satoshi Nakamoto. After that, through its many unique properties, Bitcoin allows exciting and interesting uses that can not be covered by any previous payment system in the world. Bitcoin is designed as a reward in the software process known as mining. Bitcoin can be exchanged for other currencies, services, and products.
After all, bitcoins and altcoins are controversial because they take the power to release money from central banks and give it to the general public. Bitcoin accounts cannot be frozen or investigated by tax inspectors, and intermediary banks are completely unnecessary for intermediates for bitcoins. As law enforcement officers and bankers see "Bush, wild bulls in the wild west," police and financial institutions out of control bitcoins. Bitcoin counterfeiters are resistant. It is so computer-friendly to create bitcoin, it is not financially worthwhile to manipulate systems for fake people

History of Bitcoin

Bitcoin is the first implementation of a concept called "crypto-currency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, which is the use of creativity to use cryptography to control its creation and transactions. The doer suggests the idea of a new look. From a central authority. The first bitcoin specification and proof of concept were published in 2009 in the Cryptography Mailing List by Satoshi Nakamoto. Satoshi left the project without disclosing much about himself in late 2010. Later the community has been growing rapidly with many developers working on Bitcoin. Satoshi's anonymity often raised unjustified concerns, many of which are related to the misconception of Nature, the open source of Bitcoin. The Bitcoin protocol and software are openly published and any developer worldwide can review the code or make a revised version of the bitcoin software. Like current developers, Satoshi's influence was limited to changes made by others, and therefore they did not control bitcoin. Thus, the identifier of bitcoin is probably relevant to the identity of the person who invented the paper.

Is Bitcoin legal?

Bitcoin has not been made illegal by law in most jurisdictions. However, some jurisdictions severely restrict or prohibit foreign currencies. Other jurisdictions may limit the licenses of certain entities like Bitcoin Exchanges.

With the formal, regulated financial system, with the rules on how to integrate this new technology, we are taking regulatory measures from various jurisdictions to provide individuals and businesses. For example, a bureau in the Treasury Department of the United States, the Financial Crime Enforcement Network issued non-binding guidance how it shows some activities related to virtual currencies.

Is Bitcoin anonymous?

BitCoin is designed to allow its users to send and receive payments with an acceptable level of privacy as well as any other type of money. However, Bitcoin is not unknown and can not offer the same level of privacy as cash. Use of Bitcoin leaves extensive public records. Different mechanisms exist to protect the privacy of users and are in more development. However, most of the Bitcoin users still have to work before they can use these features properly.

Some concerns have been raised that private transactions can be used for illegal purposes with bitcoins. However, it is worth noting that bitcoin will undoubtedly be subject to such rules which are already present within the existing financial systems. Bitcoin cannot be more unknown than cash and it is unlikely to stop being organized by the criminal investigation. In addition, Bitcoin is also designed to prevent a large range of financial crimes.

Are People really using Bitcoin?

There is a growing number of individuals and businesses in the world who are using bitcoin. This includes brick and mortar business such as restaurants, apartments, law firms, and popular online services. While Bitcoin is a relatively new phenomenon, it is increasing rapidly. At the end of August 2013, the cost of all bitcoins in circulation exceeded the US $ 1.5 billion, in which millions of dollars of bitcoin exchange were made every day.

How Bitcoin works

Bitcoin is nothing more than a mobile app or a computer program that provides individual bitcoin wallet and allows the user to send and receive bitcoins with them. Thus, bitcoin works for most users. Actually, bitcoins are completely virtual coins that are designed to be self-contained for their value, banks do not need to move and store. Once you are the owner of Bitcoin, they behave like physical gold coins: they have value and business as if they used to sleep in your pocket. You can use your bitcoins to buy goods and services online, or you can remove them and hope that their value will increase in years.
Behind the scenes, Bitcoin Network is sharing a public account holder called "Block Chain". Each transaction in this laser is processed, allowing the user's computer to verify the validity of each transaction. The authenticity of each transaction is preserved by the digital signature related to the mailing address, giving all users full control over sending their bitcoin from their bitcoin address. In addition, any special hardware can process the transaction using computing power and earn reward in bitcoin for this service. This is often called "mining". To learn more about bitcoin, you can consult a dedicated page and original paper.

Who controls the Bitcoin network?

Bitcoin is controlled by all Bitcoin users all over the world, none of the bitcoin is the owner of the network, as there is no technology behind the email. While developers are improving the software, they can not force change into bitcoin protocol because all users are free to choose which software and version they use. To be consistent with each other, all users need to use compliance software with the same rules. Bitcoin can only work correctly with all the consent of all users. That's why all developers and users have a strong incentive to save this consensus.


How easy is to make a Bitcoin payment?

Bitcoin payments are easy to obtain from debit or credit card purchases and can be obtained without any merchant account. Payments are made from the Wallet app on your computer or smartphone, by pressing on the recipient's address, payment amount, and sending. To make it easier to enter the recipient's address, many walls can get an address by scanning a QR code or by touching two phones with NFC technology.


 The advantages of Bitcoin

  1. It is possible to send and receive money anywhere in the world anywhere. No bank holidays, no restrictions. No bound limits. Bitcoin allows its users to have full control of their money and gives full authority.
  2. Bitcoin payments are not currently processed either with any fees or very small fees. Users may have fees with the transaction to receive priority processing, which results in faster confirmation of the transaction by the network. In addition, merchant processors are available to help traders to process transactions, convert bitcoin into a Fiat currency and deposit money directly into merchant bank accounts. Since these services are based on bitcoin, they can be offered for a very low fee compared to PayPal or credit card network.
  3. Bitcoin transactions are safe, irreversible, and do not include customers with sensitive or personal information. This prevents merchants from the harm caused by fraud or fraudulent chargeback and no need for PCI compliance. Traders can easily expand into new markets where credit cards are not available or fraudulent rates are unacceptably high. Net results are low fees, large markets, and low administrative costs.
  4. All information related to Bitcoin Money Supply is easily available on blockchain for verifying and using any person in real-time. No person or organization can control or control the Bitcoin protocol because it is cryptographically safe. This allows the trust of the bitcoin to be completely neutral, transparent and approximate.
  5. Bitcoin users are in full control of their transactions; It is impossible for merchants to force unwanted or unknowable fees because other payments may occur with the methods. Bitcoin can be done without personal information related to payment transactions. It provides strong protection against identity theft. Bitcoin users can protect their money from all poor situations with encryption and backup system.

 The disadvantages of Bitcoin


  1. Many people are still unaware of Bitcoin. Every day, more business accepts bitcoin because they want the benefits of doing so, but the list is low and still needs to be increased to take advantage of the network effects.
  2. Betcone software is still in active development with many incomplete features in Beta. New tools, facilities, and services are being developed to make bitcoin more secure and accessible to the public. Some of these are still not ready for everyone. Most bitcoin businesses are new and still, do not provide insurance. Generally, bitcoin is still in the process of maturity.
  3. The total value of bitcoin in circulation and the number of businesses using bitcoin is still very low which they can be. Therefore, relatively small incidents, trade, or business activities can affect the price significantly. In theory, this instability will diminish as bitcoin markets and the technology will mature. The world has never seen the start-up posture before, so it is really difficult to imagine how it will play.


Why do people trust Bitcoin?

Most trusts in Bitcoin come from the fact that it is not absolutely confident. Bitcoin is a completely open source and decentralized. This means that at any time at any time the entire source code is accessed. Therefore, any developer in the world can actually verify how bitcoin works. All transactions and bitcoins issued in existence can be consulted by someone in a real-time transparent form. All payments can be made without relying on any third party, and the entire system is protected by heavy peer-reviewed cryptographic algorithms used for online banking. No organization or person can control bitcoin, and the network remains secure even if not all its users trust it.

Can I make money with Bitcoin?

Bitcoin is a growing place of innovation and there are opportunities for business such as risks. You should not expect to be rich with bitcoin or any emerging technology. It is always important to be careful of anything that feels very good to be true or violates basic economic rules. There is no guarantee that bitcoin will continue to grow, even if it has been developed at a very fast rate. Anything related to bitcoin needs investment time and resource entrepreneurship. All these steps and methods are competitive and time-consuming, there is no profit guarantee. It depends on each person to properly assess costs and risks in any project.
There are many ways to make money with bitcoins like mining, speculation or running a new business.


How are bitcoins created?

bitcoin mining
bitcoin mining


  1. New bitcoins are produced by a competitive and decentralized process called "Mining". This process takes a time and hardworking and finally gives Bitcoin as a reward by the network for their services. Bitcoin miners are processing transactions and are securing the network using specialized hardware and in turn, are collecting new bitcoins.
  2. Bitcoin protocol is designed in such a way that new bitcoins are made at a fixed rate. This makes bitcoin mining a very competitive business. When more miners join the network, then it becomes difficult to make a profit and the miners should be looking for efficiency to cut their operating costs. No central authority or developer has the power to control or make the system efficient to increase its profits. Every bitcoin node in the world will reject anything that does not follow the rules, which the system expects compliance.
  3. Bitcoins are made at low and projected rates. The number of new bitcoins created each year automatically decreases over time until the release of bitcoin has closed down 21 million bitcoin in existence. At this point, bitcoin miners will probably be supported specifically by several small transaction fees.


What happens when bitcoins are lost?

When a user loses their wallet, its circulation has the effect of withdrawing money. The lost bitcoin still lives in blockchain like any other bitcoin. However, there is no way to find lost bitcoins always remain inactive because there is no private key (s) that will allow them to be spent again. Due to the law of supply and demand, when low bitcoins are available, the remaining ones will be in high demand and will increase the value for compensation.


Bitcoin scale: A major payment network

Bitcoin network can already process a large number of transactions per second. However, this is not quite ready to reach the level of the main credit card network. Work is going on to lift current boundaries, and future requirements are well known. Since its inception, every aspect of the Betoken network has been in the continuous process of maturity, adaptation, and expertise, and it should be expected to last for the next few years. As traffic increases, more Bitcoin users can use light clients, and full network nodes can become another special service.


Can Bitcoin be regulated?

The bitcoin protocol cannot be modified without the cooperation of all its users, who choose which software they use. The attempt to delegate special authority to the local authority in the rules of the Global Bitcoin Network is not a practical possibility. A rich organization can choose to invest in the mining hardware to control half of the network's computing power and may be able to block or reverse recent transactions. However, there is no guarantee that they can retain this power because it requires all other miners to invest in the world.

However, it is possible to control any other means of bitcoin in a similar fashion. Like the dollar, bitcoin can be used for different purposes, according to the laws of each jurisdiction, whether some can be considered a legitimate area or not. In this regard, Bitcoin is no different from any other tool or resource and can be subject to various rules in each country. Bitcoin usage can be made even more difficult by the restricted rules, in this case, it is difficult to determine which percentage of the user will use the technology. A government that chooses to ban bitcoin, stops development of domestic businesses and markets, transfers innovation to other countries. The challenge for regulators, as always, is not to undermine the growth of new emerging markets and businesses, to develop effective solutions.

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Bitcoin: A Peer to Peer Electronic Cash system Bitcoin: A Peer to Peer Electronic Cash system Reviewed by The Scientific World on July 13, 2018 Rating: 5

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