Bitcoin is a payment system with the same unit of payment. This is a decentralized network basis of which is the equality of all participants. There are no separate servers in this network and each node performs the functions of both client and server. Such network is also called peer-to-peer and its members are peers.

Bitcoin has no central controls. Its role is performed by cryptography. Unlike the traditional banking system, where the highest authorities of each country are responsible for emission of monetary units, bitcoins are created by everyone and exactly as much as the power of their computers allows.

In addition to self-generating of Bitcoin with the special software there are several ways to get it: as a payment for any goods and services, as a result of certain transactions in cryptocurrency exchangers or by purchasing Bitcoin from other owners.

Bitcoin itself is divided into particles which were named after its creator - “satoshi” and the nominal value of each - 0.00000001 bitcoin.

Should be noted the amount of bitcoins, which is planned to be created, is limited. It is only 21 million units and it is assumed that it will be generated until 2040.

In 2011 one of the companies in America released cash bitcoins which have the form of coins of several denominations and gold-plated bars. It became collectable and have great value for investors.

History of Bitcoin

The creator of Bitcoin is considered to be Satoshi Nakamoto. However, nobody knows who is hiding under this pseudonym. There are different opinions about this. Someone suggests that the Japanese, someone - that an American programmer. One of the many ideas is that a group of developers lies under this pseudonym. , Bitcoin was for the first time mentioned as an alternative settlement system by the Japanese Wei Dai in 1998.

The main idea in creating the system was to replace the central emission with the emission by the users themselves. At the first stage of the development of Bitcoin a situation was created in which the creation of coins was simple and affordable. However, the new bitcoins generation algorithm is designed in such a way that it becomes more difficult to create new coins as the system develops and the amount of currency increases. Awareness that it is cheaper to buy cryptocurrency than to generate will lead to the second stage - trading on the exchange. The third stage, the stabilization stage, will come when the base of the system’s currency reaches 21 million units.

Bitcoin (BTC, sometimes XBT) is a peer to peer payment system, essentially a cryptocurrency. Bitcoin has no material equivalent and it exists in the form of records in a special database which is so-called BlockChain (a chain of blogs). The payment system operates without any supervisory authority, transaction processing and emission is carried out collectively by network members. Bitcoin cryptocurrency was created by anonymous Satoshi Nakamoto in 2009. The main idea was to create a decentralized database copies of which will be stored by all participants in the system in an encrypted form. Units of payment are bitcoins. Bitcoins are stored on special wallets. All information about the transactions is available in the open mode while the wallets are completely anonymous.

Bitcoin cryptocurrency features

While making various transfers there is always doubt about the correctness of the specified details. There is no reason to fear in the Bitcoin system. If the recipient data is incorrect the transaction will not be executed. Accept this, in case of doubt the system provides the ability to view information about the existence of an address. If the transfer will be done to you it is possible to easily find out whether the transfer has been made on the Bitcoin network. All transactions which are carried out in Bitcoin have its records in the "open book" and everyone has access to it. A link to the transaction may be sent to e-mail in case of wish. All transactions are anonymous and therefore the data on the sender and recipient are not visible to anyone.

As mentioned before Bitcoin is a decentralized payment system. The lack of general control over the network does not allow the centralized attack and also implies equal conditions for all participants in the system. In traditional banking through a computer each of us has access only to bank accounts. As for bitcoins, currency is stored on a hard disk of a computer, flash drive or any other information carrier. At the same time it is possible to manage bitcoins only if you have a private signature key.

Another feature of this currency is the impossibility of forgery. Due to the fact that the total number of bitcoins is limited then the algorithm for their generation becomes more complicated with time. In addition, each previous year the amount of bitcoins which are possible for generation is higher than in the current year.
Also the feature of this cryptocurrency can be the fact that in case of loss or damage of the storage media on which the bitcoins are located, the bitcoins themselves are not restored. If you lose the keys to access your e-wallet, you also lose access to bitcoins, as they are not recoverable.

About Bitcoin exchange rate

There is a story happened in 2010 when a man bought 2 pizzas for 10,000 bitcoins. At that time this amount of currency was equivalent to 40-50 US dollars. In August 2017 the cost of 1 bitcoin for a period exceeded 4,000 US dollars. With simple calculations these 2 pizzas would cost at least 40 million US dollars.

The amount of bitcoin is limited. There is an approximate graph of the emergence of new units until 2033 which allows to contain inflation.
The average exchange value as of August 19, 2017 is 1 (BTC) = 4,339.62 (USD), 1 (USD) = 0.00023 (BTC). Current capitalization is 71 billion.

Bitcoin features

1. Decentralization and availability. You can connect to the system with your own wallet or web interface of special monitoring services from anywhere in the world without passwords or any other authorization.
2. Full transparency of calculations. Theoretically, you can track the history of any payment.
3. Lack of control over the network. There is no controlling authority in the system so there is no possibility of refunding payments, as well as blocking, freezing accounts.
4. The possibility of anonymous payments. Opening an account - creating an address does not require binding to the owner.
5. Super protection. With each new unit the computing power required by miners to calculate the entire chain from scratch grows and the longer the chain, the harder it is to “hack” the network.

Bitcoin ranks first in the list of cryptocurrencies in the analytical service Coinmarketcap which indicates that this currency is in the greatest demand among the trader and cryptoinvestors and has high liquidity, stable exchange rate as well as prospects for further development of the system. Bitcoin can be exchanged through special exchanges for ordinary money or used directly as an instrument of payment.