So, who made Bitcoin?
It was first stated in a research paper by Satoshi Nakamoto in 2008. He proposed in his paper that it will be a peer-to-peer electronic cash system which will use a cryptography technique for transactions. No one knows his true identity as he was mysteriously disappeared. Many people claimed to be Satoshi Nakamoto, but there wasn’t strong evidence to back those people.
Now the next question arises what are Bitcoins?
Just like we transfer money from one wallet to another, something similar happens with Buy bitcoins. You can never touch it or see it. Every transaction related to Bitcoin happens virtually. There is no presence of centralized authority to control the value of Bitcoin, so its value fluctuates every moment. Basically, there is a certain restriction while transacting through banks. While transacting through Bitcoin, such restrictions are not used. During its initial days, Bitcoin didn’t have a specific value as people didn’t recognize it. Because of its non -physical form, it didn’t get that much of importance. But slowly, people recognized it and its value kept on increasing.
How Do Bitcoin transactions work?
Every Bitcoin transaction go through a complicated process of data mining. When someone sends a Bitcoin to a receiver, their transaction details get stored in a blockchain. These blockchain stores every transaction related to Bitcoin. They store all these transaction histories in different computers called nodes. Every Bitcoin in a blockchain has a specific address. These addresses are in an encrypted format which is decrypted by data miners. To confirm a Bitcoin transaction, every data miner must use their powerful computers to decrypt the encrypted Bitcoin.
There many data miners who use their computers to decrypt a transaction, but the one who decrypts first will get a small amount of Bitcoin from the transaction as a decryption fee. This makes Bitcoins a lot safer as it is impossible to hack Cryptocurrency Exchange. To hack Bitcoin transactions, a hacker needs to intrude all the nodes at once, which is literally impossible.
Is it safer to invest in Bitcoins?
There is a risk in investing in Bitcoins, as many markets do not accept payment in the form of Bitcoins. If you buy a Bitcoin and wait for its price to go higher, then there might be a possibility that instead of increasing its price has gone down thus, risking all of your investments.
I just want to say that every Bitcoin transaction is a math problem and to complete the transaction each problem needs to be solved. If you want to mine Bitcoins, then keep it in mind that total Bitcoins earned by you should be greater than the electricity consumed to decrypt a transaction.