Bitcoin and Blockchain

Welcome to our first article of our Coins series where we cover the fundamentals of different cryptocurrencies — big ones as well as lesser known ones. So without further ado, let’s get to our first coin.

As our first coin we couldn’t choose anything else then forefather of all coins. Bitcoin (BTC). If you open Wikipedia you will find out that Bitcoin is defined as “a decentralized currency without a central bank or a single administrator”. But just for anyone who never heard anything about Bitcoin. Bitcoin is online cryptocurrency that can be used as a payment in some online stores or even in some states now. But most people are just “holding it” because of it’s increasing value. That is just something to begin with and now let’s start with history.

History

First mention about Bitcoin was published in 2008. In 2009 it was released as an open source code. It was released by unknown person or group of people. We only know that he/she or they are called Satoshi Nakamoto. The Bitcoin network was made by Nakamoto in 2009 when he mined the starting block of chain. In 2010 happened the most known transaction when programmer bought two Papa John´s pizzas for 10 000 Bitcoins. Nowadays if you would pay this amount of BTC for two pizzas, they would cost you 565 million dollars. From 2010 till today the price was fluctuating and in the last year or two going to the big heights.

Blockchain

Bitcoin is running on the technology that is called blockchain. Now what is this blockchain? It seems realy complicated, and it definitely can be, but it’s core is quite simple. You can have two definitions. The hard one: It is a system that records information and thanks to these information it makes it hard or impossible to change. Also it is some kind of digital ledger of transactions and it duplicates them and distributes them across the entire network of computer sytems on the blockchain. But from this, many can hardly understand what’s going on. So let’s try being a little bit more comprehensible. Imagine it as a chain of blocks, as the name suggests. Each block contains info about one transaction (sender, receiver, the amount). And the block consists of three main parts.

Data. Here you can find information about the transaction. About who send it. Who received it. And how much money or BTC was sent.

There is also something called hash. It is unique code for each block. It is something like a fingerprint of the block. You can’t find two same hash codes in the world.

The last part is called Hash of previous block. Each block contains his hash and also hash of previous block. So blocks in chain point to each other. But there is the first block that can’t point to any other block .This starting block is called the genesis block.

Now if you temper with one block, that causes the change of it’s hash. But because of that all other blocks further in chain are now invalid. And it takes some time to recalibrate the blockchain. In case of Bitcoin it takes about 10 minutes. But this article is about Bitcoin so I hope you get at least a vague idea of what blockchain is. And there will definitely be single article just about Blockchain.

Advantages and disadvanatages

Here I would like to talk about advantages and disadvantages of investing in Bitcoin, but not only them, also about the possibilities and what it can bring you. Please keep in mind that we did our own research so maybe we will see diferent ones than you would write down.

So let’s start with advantages. The biggest advantage that most of people see when they are investing in Bitcoin is the vision of high returns. That is true, but you have to know what you are doing at least a little bit. As a second one we can mention that Bitcoin is decentralized. This means that in contrast with dollar or any other currency, it can’t be regulated by any government or central bank. Another advantage is the possibility of payment with BTC. This one is getting really huge support in the last few monts when huge companies and/or states ( El Salvador) are starting to implement or adopt Bitcoin as their payment method or official currency. And as a last one of many advantages we can add it’s really quick processing. Compared to normal tranasactions, BTC transactions are much faster.

Now let’s get to the disadvantages. Some people may see BTC as a per fect payment method, with it’s decentralization nad value. But still there are some. Volatility. That is something you can mostly hear connected with prices of many cryptocurrencies. When you say that price is extremly volatile, it means that it keeps rising and falling. It does not keeps it’s value at one number.

We can see another disadvantage in something that is called Risk of loss. This can occure when someone has stored their BTC on hard drive or hardware wallet. This can happen when one of these devices get lost or virus corrupts it’s files. And through this we can get to last disadvantage and that is: No Refund. When hard drive with Bitcoins get lost there is nobody who will give you something as a reund. Your Bitcoins are lost forever.

Personal experience?

Bitcoin was my first crypto I ever bought. That was in year 2018 and since that I can’t say I am disappointed or I ever was. For me it is great way how to save my money and even maybe how to increase their value over time.

Thank you for reading.