Behind The Story Of 21 Million Bitcoins
A lot of secrets are hidden behind the success of Bitcoin.
Bitcoin, a term that has always been in the discussion over the last few years but the form we got to see this year (2021) has been awe-inspiring. Bitcoin has given a new look to the financial industry. Some countries have adopted it positively, and large payment platforms like PayPal have also shown interest in it. The credit for its success goes to the technology behind it, which we know as Blockchain.
Let’s understand its merits closely. There is a big difference in the finance industry today that we cannot manage our own money in our way.
Majorly, we only have two options to manage our money. Either we manage the cash ourselves or use the service of the bank. But here both have their disadvantages. Fear of theft or any other problem in managing cash, and in the bank case, some conditions of the bank have to be accepted (i.e., Withdraw limitations). Both the cash and the bank are under the control of the government, which is centralized.
So here Bitcoin comes in the picture. The beauty of Bitcoin is it’s completely decentralised. This means it is not in anyone’s control and no restriction(If you are an owner, then you have complete right to manage it in your way).
## Is Bitcoin gives a fixed mining reward?
No, the reward will be half after completing a particular cycle. This is called halving in technical language. Halving meaning that the mining reward will be half of the current reward( i.e., If the current reward is 12.5 BTC, then after halving it will be 6.25 BTC). Bitcoin’s halving duration is approx. 210000 blocks (4 years).
## How new Bitcoins are created?
- Here Satoshi Nakamoto has made it very interesting. When miners mine a block, then the reward will generate, and it will be passed on to the Miner address (called Coinbase Transaction).
- So we can say that in an average of 10 minutes, several Bitcoins (Based on reward) come out.
## Why do we need 6 confirmations?
- The reason is that the bitcoin blockchain has many internal forks like one node generates the block quickly and some nodes accept it, and the same situation happens with other nodes, but both nodes store different transactions in the block. In this case, only one block will be valid and accept over the blockchain. So whatever is the longest chain, it gets added to the blockchain.
- As per the standard, if 6 nodes confirm the block, then it assumes that it is accepted and added into the longest blockchain.
## What is the validity of Bitcoin?
- Bitcoin is like digital gold. It will never end, and we cannot destroy it.
- We have to simply care about the private key (if we own it as a node). In case of an exchange, you just remember the username and password (or 2FA code).
Don’t forget to eat almonds every day if you own Bitcoin. :)
## Is there any fee to do a Bitcoin transaction?
- Yes, every bitcoin transaction has certain fees. Interesting thing is that fees do not depend on the transaction amount. (It doesn’t matter that the transaction amount is 0.2 BTC or 100 BTC).
- As per the current scenario (Feb. 12, 2021), the transaction fee is around $29.73. It keeps going up and down.
## Who gets the Bitcoin fee?
- All the transaction fees that come in a block, it goes to the miner. Yes, It would be strange to think, but the miner also gets a fee amount apart from a reward.
- So when the miner picks the transactions to create a new block, it prioritizes by higher transaction fees.
## Bitcoin code is open-source?
- Yes, Bitcoin code is open-source, written in
C++You can find it on Github.
## How many transactions can come in a block?
- A block capacity is 1MB, and it can store up to 3000 transactions.
- The size of each transaction depends on its number of inputs and outputs.
## Can we use it for our daily needs?
A big no, There are two reasons that it cannot be used for regular purposes.
- Transaction Fee: The fee that we have to pay is very high, as per today’s stats. It is something like $20 per transaction, which is highly expensive.
- Transaction Time: The average time for a successful transaction is 30 minutes, and it cannot be for waiting.
I have also shared my experience in blockchain. Here I discussed blockchain with a lady who has a non-technical background.
Stay connected with me for more information about blockchain.
If this article helps you, then smile because it looks good on your face and clap because a smile also looks good on my face. :)
My new article will be coming soon about Ethereum.
Thank you for reading.
