What is cryptocurrency?
Cryptocurrency is a type of cryptocurrency; Which has no real form. It only exists in the internet world; Transactions using it are only possible online not offline. Whose entire activities are carried out in a secure process called cryptography; It is software based only, you can't touch even if you want to.
Some shopping sites now offer cryptocurrency transactions. You can buy things from those sites using cryptocurrency. It is hoped that in the near future cryptocurrency will be used everywhere.
How many types of cryptocurrencies are there?
There are currently about 17,499+ types of cryptocurrencies on the market according to coinmarketcap.com . The most popular of these are: Bitcoin, Etherium, Lightcoin, etc .; Bitcoin is the world's first successful cryptocurrency.
We will first calculate the total value of Bitcoin because it is simple. As of February 11, 2022, the value of all bitcoins in the world was $851,455,626,804 USD, according to CoinMarketCap.
For the convenience of our discussion, cryptocurrency means bitcoin. Because we will have the advantage to say and understand.
How does Bitcoin work?
Before we know how Bitcoin works, we need to know the history of Bitcoin. Why and how Bitcoin became popular. Why are people so obsessed with Bitcoin nowadays? So let's take a look at the issues in stages:
History of Bitcoin
The issue of Bitcoin came to the notice of the people on August 16, 2006 when a domain called bitcoin.org was registered.
On October 31 of that year, a link or paper titled Bitcoin: A Pair to Pair Electronic Cash System was published. The author was a man named Satashi Nakamato. From then on, the journey of Bitcoin started.
Note: It is not yet known who Satashi Nakamoto was or what his real identity was.
In the first case, the value of Bitcoin was much lower; For example, 1 bitcoin could be bought for 22 dollars. But now, on February 10, 2022, you have to spend 44,906 USD to buy a bitcoin.
You may wonder how I can buy Bitcoin with so much money; I don't have that much money. It doesn't cost much to buy Bitcoin.
You can buy small units of Bitcoin if you want. One taka is equal to 100 paise, so one bitcoin is equal to 100000000 satashi, that is, one bitcoin carries numbers up to eight decimals.
You can read Wikipedia's history of bitcoin page to know the whole history of bitcoin.
Why is Bitcoin gaining popularity?
Security and privacy are some of the reasons why Bitcoin is so popular.
Security: Bitcoin is a highly secure online money. It saves every financial transaction in the form of blockchain. Each transaction goes through a lot of verification process to be confirmed. If you want to change a transaction lightly, there is a big change in the block.
Privacy: You do not need personal information to buy or sell Bitcoin. Since no one or any country can control it, there is no way to know who is doing the transaction. That is why hacker or illegal business bitcoin transactions are increasing.
Decentralization: As the money of USA is controlled by Federal Reserve Bank, the money of each country is being controlled centrally. But no one can control Bitcoin. It is automatically controlled and open; Anyone can see the transaction if they want.
According to most experts, Bitcoin is becoming so popular for decentralization. Many do not want anyone to play with or control their money. Since all transactions are public, there is no possibility of fraud.
Blockchain and cryptography in Bitcoin
Bitcoin is a cryptocurrency (vartual money). It has no real existence. It's just a computer file. Since it is a matter of money, privacy and security will be needed. For this, cryptography and blockchain methods are used in Bitcoin. Each bitcoin transaction is stored in a public database in the form of a blockchain.
Blockchain is a peer-to-peer network. When the word blockchain is broken, two words "block" and "chain" are found. A block is a box in which information is stored, and a chain is a chain by which one block is connected to another.
Every bitcoin transaction information is in the form of a blockchain. And these are public or open, meaning anyone can see the transaction. There is a but here, even if you can see the transaction, you will not be able to see who had the transaction with whom.
Now to make the blockchain system work, you have to do data encryption and decryption. Otherwise no information can be kept safe. Privacy will be ruined if it is known from whose account money is going to whose account.
This encryption and decryption work is done by cryptography; Let's see how cryptography encrypts data. Here we will look at the methods of cryptography that are used in blockchain. The article will only get bigger if we discuss all the aspects of cryptography.
Cryptography: There are basically two types of cryptography algorithms used in blockchain. There are two algorithms: the asymmetric-key algorithm and the hashing algorithm.
The hashing algorithm is a process by which a simple text is sorted randomly; The SHA-256 hashing algorithm is commonly used in blockchain. It is the one way hash function.
The benefits of the hashing algorithm are:
Avalance effect: A slight change in information can lead to a significantly different output.
Uniqueness: You will get a unique output for each input. This output does not match anyone.
Data is stored inside blocks using a hashing algorithm. The hashing algorithm is also used to bind the blocks together in the form of a chain.
Asymmetric-key: This generates a specific password or key for each user. Basically protects Bitcoin from hackers or unauthorized access.
How safe is it to use Bitcoin?
To find out if using Bitcoin is safe, we need to know the algorithm that Bitcoin uses. Bitcoin uses blockchain and hashing algorithms, a very advanced technique. No reverse engineering can be done with the hashing algorithm; Even if you want to, no one will be able to identify the key by looking at your hashing key.
Every transaction is recorded in the public database so bitcoins cannot be copied, counterfeits cannot be created. Since everyone can see how much money you have in your account, you can't spend more than you want.
In the early days, people used to save bitcoin on hard disks or pen drives. But now with the increase in demand, various companies are making online wallets; Which can be used to easily save bitcoin.
These wallets can be hacked. Then your money or coins will be hacked or your money will be taken away by hackers. But it is not the weakness of Bitcoin that is the problem of the wallet companies. So if you have a lot of bitcoins, keep their code offline. Now we understand that Bitcoin cannot be hacked or destroyed. Then Bitcoin is safe.
Bitcoin is safe, but is it safe to use Bitcoin?
Bitcoin has no physical value; It has demand so it has value. Bitcoin will suddenly become worthless if the world does not realize its demand; Then you will not be able to trade with Bitcoin. Your money is gone in the blink of an eye.
However, the current situation does not say anything like that. Investing in it can be as daunting as getting rich overnight.
Why Bitcoin Has a Price:
In addition to money, there are many things that we consider as valuable as gold and diamonds. Think; Money is a piece of paper. But why is it so valuable. Because with money you can do whatever you want. Bitcoin has value because with Bitcoin you can buy things you want. You can convert Bitcoin to real money if you want; This is why it is valuable to people.
The easiest way to earn bitcoin
There is a very simple process to earning bitcoin; But income is not easy. Here are three ways you can easily earn bitcoin.
Buy Bitcoin with money
If you have money to buy Bitcoin or if you want to buy Bitcoin with money you can easily buy it. You would spend about 52,600 today to buy one bitcoin. You can buy Satoshi if you want. Satoshi is a tiny fraction of bitcoin; You only have to spend 0.00052600 to buy 1 Satoshi. That means with 1 dollar you can buy 16 satoshi.
Bitcoin income by mining
How to Bitcoin Mining?
Those who verify Bitcoin during Bitcoin transactions are called Bitcoin Mining.
Is there any fraudulent transaction while trading Bitcoin? Is there any unauthorized activation? As I said before, Bitcoin does not transact with any group or individual, then who will do the verification?
All these verification processes of Bitcoin are done by minors. Some bitcoins are given as a gift to miners for mining for this verification. Anyone can do bitcoin mining if they want. Yes, you can earn bitcoin by doing bitcoin mining if you want.
What does it take to mine bitcoin?
Mining didn't take much at first. Bitcoin could be mined by ordinary computers; But as the days go by the blockchain is getting bigger because the information of every transaction is in the blockchain. So it is difficult to calculate by computer.
That's why you have to have a high-powered computer to do bitcoin mining. Mining is not currently possible with personal computers. If you want to do bitcoin mining, you need to have a good professional computer setup.
Selling products in exchange for bitcoin
If you have a store, you can take payment through Bitcoin. If you have an online business, you can also take payment through Bitcoin.
Simple presentation: Bitcoin is one of the many cryptocurrencies; It was invented by Satoshi Nakamoto; 1 crore coin in 10 crore satoshi. Cryptocurrencies basically use blockchain techniques. Bitcoin has its advantages as well as its risks.
Some questions and answers about Bitcoin:
What is Bitcoin?
- Bitcoin is one of the first successful and popular cryptocurrencies in the world.
Who invented Bitcoin?
- Satoshi Nakamoto.
Why is Bitcoin becoming popular?
- Bitcoin's popularity; It cannot be controlled by the government of any country or anyone. Another reason for the popularity of Bitcoin is security and privacy.
- Some ways to earn Bitcoin are: to buy Bitcoin with money, to exchange goods for Bitcoin, to make Bitcoin or to mine.
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