Finance

Bitcoin: The First Decentralized Cryptocurrency

Introduction

With the growth of technology today more and more of work is getting online. For example paying your mobile recharge bills, electricity bills, booking train tickets, etc. All the work is carried out on an online platform. Same goes with cash payments and transfers. Bitcoin is actually a cryptocurrency. This means that it is a digital asset to facilitate exchanges. It can also be called as electronic cash. Bitcoin as the topic says is a decentralised currency, it means, unlike the offline banking system it does not have a single owner. It works without the control of a central bank. Therefore all the transactions are maintained and recorded in a public distributed ledger also known as blockchain. Network nodes can validate the transaction and the transaction, for example, X person sends to Y person, this all is broadcasted and is in the public domain.

Using a bitcoin wallet:

As it seems the concept of bitcoin is complicating to understand but let us try to learn how one gets access to it. A bitcoin wallet is basically the place to store a bitcoin. Bitcoin wallet allows one to send and receive bitcoins. It also keeps one updated about all the transactions. There are four main types of bitcoin wallet. These are desktop wallets, mobile wallets, web wallets and lastly hardware wallets. Now if you are a new user first you need to get the Bitcoin wallet installed. Once you install the Bitcoin wallet it will generate your Bitcoin address. You can create more Bitcoin address whenever you need it next.

bitcoin wallet

Every bitcoin wallet keeps a secret key or seed. This key is used to sign transactions between the two parties. Once you sign a transaction you have to confirm it. This is done through a process called mining. Once you confirm the transaction, the transaction will be included in a blockchain. One important thing to note here is that all this work is done under strict cryptography. Cryptography creates mathematical proofs to maintain a high level of security.

Conclusion:

Bitcoin wallet has been criticised as bitcoins can help in illegal transactions like theft from exchanges. Bitcoin is also referred to as an economic bubble. This is the reason why some of the countries have praised the idea of bitcoin while on the other hand, some have strictly forbidden its use.