7 important things you need to know about Bitcoin

The history of the first cryptocurrency Bitcoin (BTC), the system behind the Bitcoin network blockchain are the other topics that you can read in the article.

Table of Contents

What is Bitcoin (BTC)?

Bitcoin (BTC) is a cryptocurrency used and sent electronically. Bitcoin, which is not under the control of an institution or person, is a network of decentralized partners. The unit of value transferred through the Bitcoin network is called Bitcoin (BTC).

History of Bitcoin

Bitcoin was introduced to a small group in 2009 by a software specialist or group, nicknamed Satoshi Nakamoto, who made the mathematical basis of it in 2008. Bitcoin’s starting point was to produce an exchange tool that could be transferred electronically, safely, verifiably and invariably, and independently of any central authority. Bitcoin is being produced all over the world by computers with free software.

What does Satoshi mean?

The Bitcoins, whose number is limited to 21 million, can be divided up to a hundred million, and this smallest one is named after the founder of the Bitcoin, “Satoshi”. One BTC equals to 100 million Satoshi.

How did Bitcoin appear?

Despite over 10 years, Satoshi Nakamoto defines himself as a man living in Japan at 37, and the speculations about who he really is continuing to exist, but his identity is still unclear. His perfect English and his Japanese software knowledge arouse suspicions about his identity and Nakamoto is estimated to have about 1 million Bitcoins.

By mid-2010, Satoshi Nakamoto, who transferred Bitcoin to some of the leading members of the BTC community, chose Gavin Andresen as the leader of the software team. Following Nakamoto’s transfer of the project, Gavin Andresen’s main focuses are on the preservation of the decentralized structure of Bitcoin.

How does Bitcoin work?

There is a kind of account registration called blockchain behind the Bitcoin network. Digital records of every transaction in blockchain are merged into blocks. If only one letter or number is tried to be changed in a transaction block, all of the following blocks are affected.

The system allows two people to transfer Bitcoin or make payments to each other without a central authority such as a bank or payment infrastructure. The user sees only the Bitcoin amount and transaction results in the digital wallet. If you have a public Bitcoin account, everyone can see how much Bitcoin is hidden on that account. They just do not know that the account belongs to you.

Due to the fact that it is an open account register, the error or fraud can easily be detected and fixed by anyone. The user’s wallet can verify the validity of each process. The authenticity of each process is protected by digital signatures corresponding to the sender addresses. Completion of the Bitcoin process may take several minutes, depending on the verification process and the trading platform. The Bitcoin protocol is designed to take 10 minutes for each block to be processed.

What is a distributed ledger?

The ledgers, the basic unit of accounting, are as old as writing and money. The records in the paper were digitalized until the 80s when personal computers were introduced. The first digital ledgers imitated the accounting of the paper-based world and were used as the logistics of paper documents rather than the creation of digitization. Paper-based institutions (money, seals, written signatures, bills, certificates, etc.) constitute the backbone of society.

Along with the discovery and use of some new and interesting algorithms, cryptography has enabled the creation of distributed ledgers. In its simplest form, the distributed ledger is a database that is maintained and updated independently by participants. The distribution is unique; records will not be transmitted to various nodes by a central authority, instead, it is held and created independently by each node.

That is, each node on the network processes each action, reaches its own conclusions and then votes these conclusions to provide the majority of votes for these results. As a result of these votes, when there is consensus, the distributed ledger is updated, and all nodes maintain their own copy of the ledger. This architecture, a recording system going beyond a simple database, allows for a new dexterity.

The formation of distributed ledgers symbolizes a revolution in how information is gathered and communicated. It is true of both static data (a registry), and dynamic data (transactions). Distributed ledgers lead users to go beyond simple custodianship of a database and to use, manipulate and extract value from databases — less about protecting a database, more about managing a system of record.

How to buy a cryptocurrency?

In order to buy cryptocurrency, you can use the accounts of international stock exchanges other than the cryptocurrency exchanges in the country you are in. All cryptocurrencies other than Bitcoin (BTC), the first cryptocurrency, are called altcoins and there are approximately 1600 altcoins. If you have decided to buy coins, you need to have your cryptocurrency wallet. You can choose between desktop, web, mobile, paper or hardware wallets.

You can buy the cryptocurrency with your credit card, or a friend can transfer coin to your digital wallet. Many stock exchanges also have their own crypto-wallets. You can keep your coins on the stock exchange or transfer to your crypto wallet. When you make transactions, you just need to transfer the coins from your crypto wallet to the stock exchange.

How to exchange a cryptocurrency?

Local and international stock exchanges offer to sell or trade coins directly with a credit card. Exchange markets allow exchange between cross-currencies. Because trading in exchange for money is subject to taxation or regulation, and because many countries do not yet have legislative on this, exchange markets are more common.