Understand everything about what is Bitcoin, what is Cryptocurrency, and what is Blockchain?

What is Bitcoin, Cryptocurrency and Blockchain?
What is Bitcoin, Cryptocurrency and Blockchain?
What is Bitcoin, Cryptocurrency, and Blockchain?
What is Bitcoin, Cryptocurrency and Blockchain?

A few years ago or even now, words like Bitcoin, Cryptocurrency, and Blockchain gained a lot of visibility, became headlines and news from many media outlets, revolutionizing the financial market, and bringing up a discussion around the subject and its impacts both today and in the future. Therefore, we will talk about each one quickly and concisely like What is Bitcoin, what is Cryptocurrency, and what is Blockchain, and later on, in this article, we will go deeper into each one.

Now first let us see each term quickly What is Bitcoin, what is Cryptocurrency, and what is Blockchain:

  • What is Bitcoin: 
    The term Bitcoin is often misused to refer to cryptocurrencies. In short, it is a digital currency that can be used as a means of payment. It is used in several transactions, in addition to being controlled by a network that does not depend on central banks. It is already a billion-dollar market.
  • What is Blockchain: 
    Blockchain is the specific technology of recording information from chains of blocks protected by cryptography. In short, the main objective is to preserve the security of transactions.
  • What is Cryptocurrency:
    It is a means of the decentralized exchange. It uses blockchain technology and cryptography to ensure the validity of transactions and the creation of new currency units. Types of cryptocurrencies: Bitcoin, Etherum, Cardano and etc.

As you can see, the three words are intrinsically related and interconnected. To understand more about them, it is necessary to explain a little bit of the history and how the first cryptocurrency in the world, Bitcoin!

1. Bitcoin

Bitcoin History: Bitcoin appeared more than 12 years ago, in 2008! Its operation is described in the famous paper by Satoshi Nakamoto (person who developed bitcoin), which is a pseudonym in which he hides who is behind it all, or the people who invented this virtual currency.

In short, Bitcoin is a decentralized cryptocurrency and had its first appearance in the discussion of The Cryptography Mailing.

It is a currency that is not issued by any government and its price fluctuates very frequently and on a daily basis. This is due either to speculation around the currency, scandals involving the system around Bitcoin, or even technological advances and the emergence of other cryptocurrencies.

The currency has a high potential for variation, with its quotation being able to change, on average, 20% during a 24-hour interval, either up or down.

Bitcoin Retrospective

2008

On October 31, 2008, when the aforementioned pseudonym Satoshi Nakamoto sent, to a restricted list of emails, the academic article describing the operation of the digital currency Bitcoin. The defended idea revolved around mining a coin through a network called peer-to-peer (person to person). That is, without depending on a bank, central authority, or government.

In addition, as was evidenced in the document, when people started to trade and invest in Bitcoins, nothing could be done by the government that would not be able to intervene in the nature of its technology, that is, in protected cryptography.

To date, Satoshi Nakamoto’s identity has not been confirmed.

2014

Bitcoin has been gaining fame over the years, including because it was the primary means of transactions for Silk Road, the virtual drug market operated on the Deep Web. It was later dismantled by the FBI which managed to end the operation.

However, all the headlines and news related to this helped Bitcoin to become more famous.

In 2014, several entrepreneurs and initiatives saw an opportunity in Bitcoin. As a result, currency exchange bureaus appeared and even companies like Dell began to accept bitcoins for computer purchases.

However, in that same year, the biggest Bitcoin broker, the Japanese company Mt.Gox, ended its activities after suffering an alleged hacker attack that stole more than 850 thousand Bitcoins.  

2017

Perhaps it was the year that most talked about the famous “Bitcoin boom”. After all, the currency left the $ 6,000 level to jump to almost $ 20,000 in a few months.

This happened because major stock exchanges, like the one in Chicago, showed interest in trading the currency / asset in order to launch Bitcoin futures contracts. In addition, those typical cases of people who quit their jobs to invest in Bitcoin also started!

The rise was also partly because important stock exchanges signaled interest in trading the asset to eventually launch bitcoin futures contracts, including the Chicago stock exchange. Bitcoin has taken the news and cases of people leaving their jobs to invest only in bitcoin have emerged, as have reports of characters frustrated at having lost their digital wallet keys.

2018

In 2018, with high speculation, Bitcoin suffered one of its biggest crises and plummeted. Its value, which in 2017 increased dramatically, has dropped considerably. These two news, which were published last year, show how much Bitcoin caused doubts and apprehension.

  • Bitcoin falls again and falls below $ 4,500, the lowest value in 2018;
  • Bitcoin devaluation scares investors

2019

In 2019, the currency is expected to mature. According to Infomoney, the expectation is that in the coming years there will be a substantial capital injection of professional investors and institutional funds. Globally reduced interest rates and signs of exhaustion of the upward cycle of the main risk assets are ingredients of attractiveness for the diversification of resources in alternative forms of value reserve – as the report comments.

How much is Bitcoin worth?

If you want to know how much Bitcoin is worth because you are curious about the value and potential of the currency or because you are thinking about investing in cryptocurrency, it is worth taking a look at the Bitcoin calculator that has this objective.


2. Blockchain

Now that we’ve discussed and delved into the whole issue surrounding what is Bitcoin, it’s time to look into Blockchain.

For example, in relation to digital currencies, each block has a record that identifies the transactions carried out. Thinking about Bitcoin, every 10 minutes a new block is made in the Blockchain system that has the transactions carried out. This represents each Bitcoin transferred by users.

Thus, for Bitcoin, Blockchain is like a place that records all the transactions made. So, imagine that you bought a product through Bitcoin. This transaction will be recorded in the gigantic Blockchain system.

The main feature of this is that this network is decentralized. That is, it is not the responsibility of a person or group to insert these transactions and save them, as for example in a bank. The record is shared across the network of computers connected to the Bitcoin system and thus, thousands of computers, scattered around the world, check codes, such as the veracity of transactions.

Is blockchain safe?

In theory, decentralization and the entire functioning of the system (explained above) is what makes everything safe. Even Blockchain technology has become very famous worldwide, has gained fame and is used by other cryptocurrencies (such as litecoin and ethereum).

It would take a large computer infrastructure to be able to hack the Blockchain system. Attackers would need to land transactions on that block, but on thousands of computers simultaneously. Doing so is very difficult and extremely complex.

In addition, Blockchain can be used for other means and is not restricted to virtual currencies only. In this way, technology can be used in contexts where there are several intermediaries who do not fully trust the parties. Thus, the Blockchain process would make this relationship or information exchange more secure.


3. Cryptocurrencies

After seeing what is Bitcoin and Blockchain let see about the cryptocurrency. Cryptocurrency is nothing more than digital currencies based on cryptography. In addition, there are already thousands of cryptocurrencies, in addition to Bitcoin, which are increasingly gaining space.

Ethereum (ETH)

After Bitcoin, it is the most valuable cryptocurrency. It is geared towards the corporate market, which allows for the execution of smart contracts in a decentralized manner. In addition, it is known for having one of the best and most secure Blockchain networks. Going beyond Bitcoin.

Ripple (XRP):

Its main function, in addition to being a digital currency, is to facilitate and allow financial institutions to make international payments, all in real time and at a more modest cost.

Litecoin (LTC)

Litecoin has been on the market since 2011 and has practically the same functionalities as Bitcoin, but with a different characteristic: cryptocurrency has a greater capacity to generate blocks. That way, Litecoin takes just 2.5 minutes to confirm transactions while Bitcoin has an average time of 10 minutes.

So guys that is all for the the article What is Bitcoin, Cryptocurrency and Blockchain? If you have still any question related to this post please ask in the comment section. I will try to answer it ASAP. Thanks and have a nice day 😉

Also read India preparing to build World’s Fastest Quantum Computer.

About Sachin Mittal 61 Articles
I am a developer and love to build things that excites me a lot

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