Steemit Crypto Academy Season 4 Beginner Course - Task 5: Bitcoin, Cryptocurrencies, Public Chains
ENTIRE QUESTION
What is Bitcoin and what was the goal behind the invention of Bitcoin? Are cryptocurrencies good for a business to accept as payment? Why?
Bitcoin is the first digital currency or cryptocurrency, it is based on a decentralized system, that is, it is not under the control of any entity, which allows it to be managed by the same users, transactions are made under the exchange of person to person. person through the blockchain in this way transactions are safer and more reliable since it does not allow the intervention of intermediaries. The bitcoin works with its own algorithm this thanks to the nodes that make up the blockchain, these nodes are secured by cryptography in this way the data registered in it cannot be modified.
The process of generating Bitcoin is done through cryptocurrency mining, however the amount of bitcoin generated may not exceed 21 million bitcoin.
11 years have passed since the invention of Bitcoin, a currency whose main objective was to provide a financial system independent of the state, this being a transparent, decentralized and incorruptible commercial mechanism which would provide support and stability to possible future crises, security and a greater opportunity to investors, Bitcoin gave way to the creation of new cryptocurrencies in the market such as Litecoin (2011), Ripple (2012), Dogecoin (2013), Ethereum (2015).
The origin of bitcoin, which until now is the maximum representative of cryptocurrencies began in 2008 when Satoshi Nakamoto (pseudonym) published an article called "Bitcoin: An electronic cash system among equals", however it was in January 2009 that the first block of 50 Bitcoins called "genesis", Satoshi explained that bitcoin was built under open source software in a decentralized system, with the appearance of bitcoin more cryptocurrencies were generated, some successful others not so much, however bitcoin is still No. 1 on the cryptocurrency list.
- It is a decentralized currency, that is, it is not controlled by any bank or financial entity.
- It does not generate inflation when creating more coins, this is possible thanks to the fact that mining in the network manages the issuance based on the real demand.
- It's fast, accessible to everyone, and can be used globally
- It is impossible to falsify or modify it, this is possible thanks to the cryptography used that provides the protection of transactions and data generated in the blockchain.
- Transactions are made from person to person so it does not require intermediaries.
- Transactions are irreversible, so it is necessary to be sure before making it since it cannot be canceled.
- It is not necessary to reveal your identity so your privacy is preserved.
- The money is yours, it cannot be intervened or stolen by other people.
Advantages
Freedom, one of the advantages of Bitcoin is that it is free of controls which allows us to manage our assets freely.
One of the advantages of bitcoin is that it is easy to transport and use, the user can send and receive money with just a QR code scan or through their online wallet
It offers the advantage of assigning your own commission, this as an incentive for the miners who are the ones who make sure to include the transaction in the new block to be generated.
It is safe, thanks to the cryptography used in the bitcoin blockchain our data and funds are safe which makes it impossible for them to be modified, stolen or manipulated by other people, however it is necessary to go through an identity verification process in the different exchanges where we will carry out the exchanges (purchase-sale) of bitcoin
Each transaction carried out within the blockchain can be verified in real time, being a decentralized network it is free from the control of any organization or entity, which makes bitcoin transparent and neutral.
Disadvantages
The bitcoin wallet uses keys or keys to be able to access our funds, these keys are unique so in case of being lost or forgotten we would also lose our assets, some wallets have backup and restoration mechanisms but they must be previously configured by the user.
It is a volatile market that presents cycles of ups and downs, which makes its value unpredictable and change dramatically
The bitcoin technology is still under development, that is, it continues to grow as developers join the project; Bitcoin is not used massively, which raises certain questions: How will it work when it is used by everyone? Will the network collapse?
Bitcoin is not governed by any law or regulation for its operation, however it is considered a financial asset, which generates some uncertainty in companies for its use
Bitcoin does not have universal regulation, each country has its own laws and regulations, that is why in some countries the use and trade of bitcoin is accepted while in others it is prohibited since they consider it illegal and that it is used in money laundering and tax evasion which would cause capital losses in the states of the world
You need internet to be able to carry out transactions, although currently there is internet almost everywhere if you were to run out of data at the time of making the transaction you would have serious problems
We are in a digital age, a time where most of the purchase and sale operations are carried out through the internet, which has achieved that cryptocurrencies are projected as a safe and transparent form of payment, the increase in the value of Bitcoin I manage to attract the attention not only of thousands of users but of companies and countries, every day more places and businesses accept cryptocurrencies as a payment method this is thanks to the growing interest of large investors which has caused mistrust to be lost in cryptocurrencies.
Large companies such as KFC, Microsoft, Starbucks and Subway have included cryptocurrencies as a payment alternative thanks to the advantages they offer such as: instant, transparent and secure payments, they can have control over their money, thus breaking the cycle of dependency. financial; There are also countries such as Japan, Australia, El Salvador where Bitcoin is a legal tender or the case of New Zealand that became the first country to legalize wages in cryptocurrencies, every day more entrepreneurs and businesses are starting accept cryptocurrencies as a payment method.
Personally I think that cryptocurrencies are a good payment option, the fact that users can make transactions directly with the company gives us security and confidence while for companies it would mean secure payments, without fraud and tax free.
Bitcoin and cryptocurrencies are changing the world quickly, so it is inevitable that in the medium or long term they will be the dominant financial system, although at the moment it is a bit uncertain and volatile.
CC: Professor @nane15