Bitcoin is an internet currency that is not regulated by any country’s government or financial institutes. It is a cryptocurrency and now there are many digital currencies and because of digitalization, we can safely say they are going to be part of our economy from now on. Recently bitcoin crossed a $40000 mark and it surged like this before in 2017 when it crossed the $17000 mark. Bitcoin is internet money and how it forms and who controls is very much based on technology.
In this article, we will cover how bitcoin formed and who invented this digital currency and what are the purposes of bitcoin. Along with this, we will also discuss other digital currencies and overall how can you invest in digital currency.
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There are many cryptocurrencies. These cryptocurrencies other than bitcoin are also known as Alternative currencies. The most famous cryptocurrencies are Ethereum, Libra, Ripple, and Tether. These currencies have different algorithms and payment structures than bitcoin. You can think of these currencies like dollar, euro, and pound. Bitcoin just got more famous and its demand increased exponentially that’s why its price jumped to $40000 dollars.
Why Bitcoin formed??
Bitcoin invented in 2008 by a Japanese whose name is Satoshi Nakamoto. The idea behind this invention was an electronic transaction system that is not under any government regulations. So people from the different regions can transfer their funds without the intervention of the government. It is open-world software so no single entity or person has control over bitcoin. Bitcoin is mined and it is not conventional mining. Digital mining is done by computer algorithms, and this generates bitcoin for the users. Satoshi Nakamoto mined 1 million bitcoins and then in 2010 handed the access code to Gavin Andersen and disappeared. Since then Andersen has led the Bitcoin Foundation. Since its creation bitcoin has seen very ups and downs. Its initial price started from 0.31 dollar and then there are many rises and plums for bitcoin. Now bitcoin is one of the lead cryptocurrencies.
Science behind Bitcoin
All information related to bitcoin is public knowledge. A blockchain is formed when there is transaction takes place. So you can’t reverse the transaction. There are network nodes that are the main communication instruments. When a new transaction takes place, it forms a new blockchain that gives notification to all published nodes which helps to maintain the record.
So transactions happen in the form of scripting. The script will be generated for the designated bitcoin wallet and the number of bitcoin being send. This unique script can not be reversed. Only work in straight-line method. Who starts mining bitcoin or receive bitcoin has to form a bitcoin private key. This private key is unique to a person and next to impossible for someone to hack it. If there is a data breach this is a different scenario. If a person loses his private key then there is no guarantee that the person ever found his bitcoin because the bitcoin network does not accept any other means to confirm ownership. So you have to be very careful about your private key.
Computer processing power is used for keeping records of the bitcoin network. These miners keep the blockchain consistent. To be accepted in the new network, miners should have proof of work. When proof of work is shown then the block is accepted by the whole network
Future of Bitcoin
So like the regular economics of world, bitcoin also works on demand and supply. As demand increases, the price of bitcoin will also increases. Founder of bitcoin put limit to bitcoin supply. There will be only 21 million bitcoin and according to one estimate last bitcoin will be found in 2141. Other than this cryptocurrencies are on rise so we can surely say in foreseeable future bitcoin will gain more popularity and this does not mean it will have ups and down but general trend will be on high.