What is Bitcoin and how is it related to Blockchain?

Understanding Bitcoin

“Bitcoin”, an innovative payment network, or a digital money-a type of money that is virtual in its entirety.

Acknowledged as the first decentralized cryptocurrency globally, Bitcoin was launched in January 2009. Digital money that an individual can buy, sell or exchange instantaneously without an intermediary such as banks or local authorities.

Aimed to facilitate the requirement of an electronic payment network relying on cryptographic proof rather than a virtue of trust, Satoshi Nakamoto originally created Bitcoin.

Since, employing cryptography to make secured payments, Bitcoin provides a lower transaction rate than a conventional digital payment. Instead operated by government-issued currencies, this digital currency holds authorization by a decentralized authority.

“The reason why it’s worth money is simply because we, as people, decided it has value — the same as gold,” Anton Mozgovoy, co-founder & CEO of Holyheld.

Each transaction of Bitcoin that has ever been made, keeps maintained on a public ledger that is accessible to everyone. This ledger which is transparent, flexible, secured, instantaneous, and cost-effective is known as Blockchain that makes Bitcoin transactions hard to be reversed and implausible to be falsified.

Bitcoin mining:

Each and every bitcoin transaction that ever occurred has to be recorded perpetually in a bitcoin blockchain ledger through a process of mining.

In simplest terms, bitcoin mining explains the method where bitcoin miners compete in order to solve complex mathematical problems that require the implication of high-scale computers and huge demand for power supply. Such computer equipment accounts for Application-specific integrated circuits (ASIC) chips that could decipher the next block of the chain.

Bitcoin is related to Blockchain, how?

Bitcoin is designed and constructed over a distributed digital record (ledger), known as a blockchain.

Blockchain depicts an interconnected matrix of data that is made up of units called blocks containing information about each individual transaction in particular of date, time, total worth, buyers and sellers, and a unique recognizing code for each exchange.

These strings of information are arranged in chronological order to make a digital chain of blocks. Once a block is augmented to the blockchain, it can be accessed by everyone who demands to view it.

As a google doc is accessible to anyone who wishes to work on that, similarly blockchain is decentralized, i.e., it is not controlled by a single institution, nobody owns it, but anyone who has a link can contribute to it. Also if several users update it, the entire information of a block gets updated.

Since anyone can edit the blockchain can cause risks as well, this is what actually makes Bitcoin more trustworthy and secured.

Simply, a transaction to be added in Bitcoin blockchain gets validated by the majority of Bitcoin holders, and a unique code is used to identify the wallet of a user where a transaction must harmonize to the appropriate encryption pattern. Such unique codes are long, random numbers making transactions difficult to be produced fraudulently.

Ending notes

• Invented in 2009, Bitcoin is recognized as the first-ever largest cryptocurrency by virtue of market capitalization. It values $47241.40 (market cap) at Dec 03, 2021.
• Conflicting fiat money and leveraging a decentralized ledger system, Bitcoins are generated, distributed, traded, and maintained via Blockchain technology.
• Augmenting exponentially, Bitcoin has a history of multiple rhythms of boom and bust in such a short duration of time and relatively holds a great value in the present financial realm.
• As the primitive virtual mode of currency meeting worldwide fame and accomplishment, the popularity of Bitcoin suffices the facilitation of transparent and immutable transactions.