Site Loader
Rock Street, San Francisco

p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px Times}
p.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px Times; min-height: 14.0px}
span.s1 {color: #2d2d2d}
span.s2 {text-decoration: underline ; color: #0d1993}

The concept of “Bitcoin” is very popular recently. “Bitcoin” is a decentralized and anonymous currency system. Users can do transactions or manage their account through an anonymous virtual account without a central administration or remittance charge. All transactions and information exchange happen via a peer-to-peer network. 

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

According to 1, Bitcoin technology was invented under the name Satoshi Nakamoto (an unknown person or a group of person), so one unit of Bitcoin is called  a “Satoshi”. Bitcoin is a type of virtual currency. Instead of issuing by any governments, it is generated by specific algorithm, and it is computationally expensive to generate.
It could be exchanged with currencies of almost all the countries, or some virtua commodities like game equipments. The total amount of Bitcoin is currently limited to 21,000,000, so it is hugely scarce.

Because of lack of central administration, all transactions are verified through a “majority vote” protocol 2. For example, when someone wants to send bitcoins to another person, he or she has to announce this pending transaction to the network, and each node(user account) in the network through peer-to-peer broadcasting is finally informed of the pending transactions. Then each node has to verify the transaction and vote either “yes” to approve or “no” to reject it. A transaction got majority voting “yes” is approved and is recorded in a distributed ledger called “blockchain”, which is chain of blocks on which all verified transactions are recorded. Every end-user maintains an own copy of the blockchain, and each time an end-user verifies a transaction by checking all previous records3. 

This decentralized design guarantees that no user is able to create money by generating a fake transaction, for instance, sending an amount of money which does not exist in the account. Moreover, each transaction is signed using crypto technology to ensure its security. Due to so many benefits around this system, many people invest a lot of wealth to it.

Post Author: admin

x

Hi!
I'm Lena!

Would you like to get a custom essay? How about receiving a customized one?

Check it out