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Bitcoin - A New Trend

We must have come across this term mainly on social media platforms. Recently, Elon Musk, the richest person in the world, announced Bitcoin as a way to buy the Tesla vehicles in the U.S. This depicts what a great deal Bitcoin must be.

Let's have a detailed look.

What Is Bitcoin?

Bitcoin is the world’s largest Cryptocurrency, the world’s first decentralized virtual currency, which is said to be created in 2009 by some mysterious Satoshi Nakamoto. The work done by this developer or a group of developers was considered regarding the project. Satoshi Nakamoto was active in this project till the end of 2010. Then he handed off the project to the open-source community and was no longer seen.

Bitcoin uses peer-to-peer technology where no banks are included and can be used as an investment. None controls it and its design is public. The free Bitcoin software is available online. Users can save a copy of the specific type of database that stores every Bitcoin transaction made by the user. It is called the Bitcoin Blockchain. They provide an exchange for products, services, and currencies but their use in the real world is limited.

The speed and price of the Bitcoin transactions will be increased as Bitcoin will get matured.

Working Of Bitcoin

  1. Traditional online payment goes through the central payment process. But Bitcoin doesn’t include the central payment system.
  2. Public key cryptography is used here.
  3. All the transactions made by the users through Bitcoin are handled by a large network of dedicated computers with dedicated software.
  4. When a sender sends some amount to another user in the form of Bitcoin, the Bitcoin addresses of the sender and the receiver along with the amount transferred are recorded in Ledger.
  5. Ledger stores the identities of the users anonymously, their cryptocurrency balances, and a record of all the genuine transactions.
  6. Ledger is stored on the systems containing the mining software that is run by the Miners. These miners check how legitimate the transactions are. The miners ensure for every transaction whether the sender has enough Bitcoins in his/her account.
  7. A unique variable is associated with every Bitcoin transaction. The job of the miners is to find it. Computers perform these highly complicated calculations. Thus, computers need to be complex too.
  8. On solving it, the other computers of the network confirm it and the transaction gets added to a chain called a Blockchain. The miners in turn are paid through Bitcoins.

Here Are Some Graphics Cards For Bitcoin Mining

  • Nvidia GeForce RTX 2080 Ti.
  • MSI Gaming GeForce GTX 1080 Ti.
  • FX AMD Radeon RX 580 GTS XXX.
  • ASUS ROG Strix AMD Radeon RX 5700XT.
  • MSI Gaming GeForce RTX 2070.
  • NVIDIA GeForce RTX 3090.

Some Positive Sides

  • It doesn’t charge any transfer fees as that of a bank.
  • Controls the creation of digital money, avoids its duplication, and has anonymity protection.
  • The time required for the whole transaction to get completed is 10 minutes, whereas, the banks may need a couple of days.
  • It has political independence.
  • Bitcoins can be sent and received using computers or smartphones.
  • Once the Bitcoins are sent, they cannot be resent back. It means the transaction cannot be reversed as the new owner will have its address on the ownership address of the Bitcoin.
  • It is harder to steal Bitcoins as only the owner can change this ownership address. Physical access is needed by this system instead of a few authentications like the traditional transactions.
  • Only the owners will know how many Bitcoins they have. Even if someone gets the address of the wallet, the owner can generate a new address for the same.

Some Negative Sides

  • It has been commented as the Economic bubble by some economists.
  • Said to be used in illegal transactions.
  • People do bet on it considering its future to be bright.
  • Its mining process requires a great amount of electricity.
  • Its price may change according to the changing time introducing thefts.
  • Used to transfer funds outside the traditional channels.
  • Users may not be cautious causing accidental deletion or improper securing of their Bitcoins.
  • Hacking is a potential threat to the Bitcoin economy.
  • It has not been accepted widely yet. One cannot buy regular household stuff with Bitcoin. However, there are some hotels and restaurants in western countries that consider it as an alternative currency.
  • It can be used illegally on the dark web and even here its theft can occur.

Conclusion

There was a lot of criticism related to Bitcoin before the spread of COVID-19. It got significant attention recently. On one hand, common people need some time to accept it whereas, on the other hand, some large and mid-scale organizations seem to get attracted towards it. Still, common people need not worry about it, as it is believed to be used as an alternative currency.


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