What is Bitcoin?
Bitcoin is a cryptocurrency invented in 2008 by an unknown person or group named Satoshi Nakamoto. This currency was used in his 2009 when the application was released as open source software.
Bitcoin is the first decentralized digital currency without a central bank, sending money from one person to another on a peer-to-peer basis through the Bitcoin network without the need for third parties (intermediaries such as banks). can. These are verified using cryptography and recorded on a distributed ledger called a blockchain. Bitcoins are created as a reward for a process called mining. It can be exchanged for other currencies, goods and services. According to a study by the University of Cambridge, in 2017 he had between 2.9 million and her 5.8 million users using cryptocurrency wallets, most of them holding bitcoin.
Bitcoin has been criticized for its potential for illegal trading, the large amount of electricity used in mining to produce new Bitcoins, fluctuations in exchange rates, and hacking of Bitcoin exchanges. Some economists call this a "speculative bubble." The Bitcoin network has been in operation since 2009 and has not stopped since. Thanks to the coin compatibility system, no one can hack the Bitcoin blockchain and most hacks are caused by human error. It's in portfolio management, not design flaws.
Bitcoin in general and other currencies
Bitcoin is a cryptocurrency. That is, it is primarily based in all aspects on the principle of cryptography, being the first currency of its kind, the best known and most widely used.
only cryptocurrency. online today. There are many cryptocurrencies today, six of which can be categorized as important, depending on the number of users, the structure of each network, and where these cryptocurrencies can be exchanged or purchased. Other Currencies All cryptocurrencies today are based on the same principles as Bitcoin, with the exception of Ripple, and since Bitcoin is open source, it can be cloned, modified and new currencies introduced. Is possible. In a way, the rest of the digital currency is created from the source bitcoin. This is the origin of all digital currencies
Bitcoin and its relationship to the blockchain
The world's largest open and decentralized digital registry. The origin of ownership can be transferred simultaneously from one party to another without the need for an intermediary, resulting in high efficiency.
The degree of security of the transfer process against fraud. Or falsification attempts, everyone in the world participates in this recording
To ensure the accuracy of transfers, the Bitcoin system keeps a log of all actions on the network called the blockchain. This record is shared by all nodes of the Bitcoin network through a system based on the Bitcoin protocol. Since the blockchain contains all actions performed with Bitcoin, we can know the balance of each address on this network. This concept is called a chain description of connections between blocks. Each block contains the hash of the previous block, and the questions continue until the first block, called the "building block" is reached. Setting up the chain in this way requires recalculating the hash of each block, so changing one block requires changing all subsequent blocks, so changing a block after a certain amount of time is not an option. becomes very difficult. block. Update the hash value of the previous block within the block. It is this property that makes the problem of repeated issuance of the same coin so difficult for Bitcoin that even the blockchain can be considered the backbone without which Bitcoin cannot exist.
The concept of decentralization and its relationship to the Bitcoin network
Decentralization is the process by which an organization's activities, especially those related to planning and decision-making, are decentralized or delegated from a trusted central location or agency.
The concept of decentralization has been applied to group dynamics and management sciences in business and private enterprise, political science, law and administration, economics, money and technology. Bitcoin is an anonymous digital currency, the transfer process only requires knowing the destination wallet number, and the transfer is stored on the blockchain with a special serial number. . It doesn't include the sender's or receiver's name or other sensitive information, so it's a common idea for those who advocate privacy or sell illegal goods (such as drugs) online.
Bitcoin is based on financial transactions, using peer-to-peer networks, electronic signatures and encryption directly between the two of them, without intermediaries managing these transactions. Funds are instantly transferred from one User Account to another without fees and a fee will be charged for redemption. We do not rely on banks or intermediaries of any kind (except network fees paid to miners). This currency is available worldwide and does not require any complicated requirements or procedures to use. When you receive currency, it is stored in your e-wallet. This currency can be used for many things such as buying books, gifts, or things that can be bought online and converted into other currencies such as dollars or euros.
What is a Bitcoin wallet and how does it work?
A Bitcoin wallet is a type of digital wallet used to send and receive bitcoins. Wallets store cryptographic information used to access Bitcoin addresses and send transactions. Some Bitcoin wallets can also be used for other cryptocurrencies.
A Bitcoin wallet is similar to a personal confidential and secure bank account, and while different banks differ, their purpose is the same: to maintain a personal Bitcoin balance. A wallet address is an encrypted combination of letters and numbers to receive bitcoins when purchasing this currency.
The main types are
- desktop wallet
- mobile wallet
- web wallet
- hardware wallet.
Bitcoin acceptance and some of its uses
While the group of sites accepting bitcoin payments for products is relatively limited compared to sites dealing with traditional currencies, the group of sites supporting bitcoin continues to grow.
This includes companies and websites as large and diverse as websites. Who sells hosting services? You can also book different websites selling domain names, social networks, videos, music and different kinds of products. In addition to purchasing products, users can exchange their existing Bitcoins for other real-world currencies. Since this exchange is between the same users who want to sell bitcoin and buy real currency or vice versa, bitcoin has its own exchange rate, a few dollars a year a few years ago. Octopus prices are now over $60,000 in 2021.
Germany is the only country that has officially recognized Bitcoin as a form of electronic money. Thus, the federal government thought that while personal financial transactions would be exempt, the profits of businesses trading "Bitcoin" could be taxed. tax
A federal judge in the United States recently ruled that Bitcoin is a currency and a form of cash and may be subject to government regulation, but the United States has yet to formally approve Bitcoin. .
While some believe that official recognition has the positive side of further legalizing the currency, it could open the door to further regulation of the currency's relationship with governments, which is one of Bitcoin's advantages. Some people think it's a contradiction. As a currency that is not bound anywhere.
Ethereum is a "function machine" that can run decentralized applications (dApps), programs that operate without outsiders or smart contracts, and thus code content that is executed under certain circumstances.
What is Ethereum?
Ether, the digital money managed by the Ethereum organization, has his second largest market capitalization in the space.
While many see Bitcoin as an important store of value, most see Ethereum as a platform for the proliferation of new cryptocurrency formats and decentralized applications.
ETH usage example
Smart contracts and dApps:
A great arrangement could pay an artist when a music dApp plays their song, or give someone an upfront payment to use cryptocurrency as a guarantee in a decentralized currency (DeFi) arrangement.
Tokenize everything:
Ethereum allows users to create their own exceptional non-fungible tokens (NFTs) that can be anything from virtual resources to real items. Customers can then exchange these tokens or use them to power other decentralized applications.
Create a new currency
Ethereum allows anyone to create their own cryptocurrency with just a few lines of code. For example, USD Coin (USDC) runs on Ethereum.
Transaction Fee:
If you send an Ethereum-based token or use the company, you will pay the exchange fee with his ETH. Why is ETH attracting attention?
Upcoming Updates:
To make it even more adaptable, Ethereum will, in the not-too-distant future, change how it maintains its organization from Bitcoin-powered interactions (validation of work) to ones that use significantly less energy (proof of engagement). will be changed to )
NFT Madness:
From processing to soil, these advanced resources have become the standard. Many of the world's largest brands have developed NFT processes to meet growing demand.
Institutional Interests:
Huge backers and foundations have invested in Ethereum, recognizing its true potential as a platform for decentralized applications.
What is Binance Coin (BNB)
Binance Coin (BNB) is a cryptocurrency that can be used for trading and paying fees.
Binance cryptocurrency exchange. As of January 2018, Binance Exchange is the world's largest cryptocurrency exchange, facilitating over 1.4 million transactions per second. Binance Coin user gets a discount on his trading fees on Binance
Exchange as an incentive. BNB can also be exchanged or traded with other cryptocurrencies such as Bitcoin, Ethereum and Litecoin. Binance Coin was created in July 2017 and initially ran on the Ethereum blockchain using ERC-20 tokens before becoming the native currency of Binance Chain, Binance's own blockchain. Using Binance Coin
Like other cryptocurrencies in development, Binance Coin has multiple uses beyond the Binance exchange, including:
trade:
Binance Coin can be traded against other cryptocurrencies on various exchanges, depending on the limits set by the exchanges.
- Transaction fees on Binance Exchange:
Transactions on Binance Exchange can be paid with BNB, and users also get discounts on this.
BNB can be used as a payment method for crypto credit card bills on Crypto.com.
The merchant can offer the customer her BNB as a payment method, giving them greater flexibility in payment methods.
- Book travel arrangements:
BNB allows you to book hotels and tours on websites of your choice. entertainment:
From paying for virtual gifts to purchasing lottery tickets, BNB serves a variety of purposes in the entertainment sector.
Many platforms allow investors to use his Binance Coin to invest in stocks, ETFs and other assets.
BNB can be used as collateral for loans on certain platforms. There are also apps that allow users to split bills or pay friends and family with her Binance coins.
first coin offering
Binance Coin was launched with an Initial Coin Offering (ICO) in July 2017. As part of the ICO, BNB tokens were distributed to various participants, including angel investors and the Binance founding team.
Here's a quick breakdown of the original BNB token distribution:
Founding team:
- 40% (80 million BNB)
- Within angel investors*:
- 10% (20 million BNB)
- General sale:
- 50% (100 million BNB)
All 100 million BNB available for general sale were sold at 15 cents per token during the ICO. Thus, Binance has collected a total of US$15 million in Bitcoin and Ethereum. Of the $15 million raised, 35% will be used to modernize the Binance platform and exchange system. 50% will go towards Binance branding, marketing and training new innovators. The remaining 15% was used as a reserve for emergencies or unprecedented circumstances.
burn bnb
As stated in the Binance whitepaper, every quarter Binance will use 20% of its profits to buy back his Binance coins, burn them and destroy them completely. Binance has been running quarterly burns for a long time, most recently with its 13th quarterly burn on October 17, 2020. Binance will continue its quarterly burn until it buys and burns his 100 million Binance coins, which is 50% of the total supply. This practice ensures that the supply of Binance coins remains limited, increasing their scarcity value.
additional sources
CFI offers the Banking and Credit Analyst Certificate (CBCA)™ program for those who want to take their career to the next level. To secure your knowledge and grow your knowledge base, find related resources below.
- blockchain
- Cryptocurrency
- digital currency
- ether
