What is a Bitcoin and How it differs from other Currencies?

In simple words, Bitcoin is one type of digital currency and also a payment system that is classified under crypto-currency. Bitcoin was introduced on October 31st, 2008, and released as an Open-Source project in the year of 2009.

Bitcoin was invented by an unidentified programmer or group of programmers under the name of Satoshi Nakamoto.

This Bitcoin System is Peer-to-Peer (P2P) and transactions take place in between the users directly without an Intermediary.

Usage of Bitcoin Currency and Bitcoin Payment System across the globe:

If you come across the Pros (Advantages) and Cons (Disadvantages) of Bitcoin then you will find more advantages than its disadvantages.

Pros:

• It’s easy to purchase bitcoins.
• There is no limit to Bitcoins. Anyone can buy any number of bitcoins they want. The best way to store a lump-sum amount of money is in terms of Bitcoins.
• Transactions take place with ease and within seconds.
• Trading with bitcoins is easy. The Bitcoin rate fluctuates within minutes.
• Privacy is to a high extent. For Bitcoin transactions, there is no need for any kind of personal details or bank account details.
• A Transaction ID will be provided after the confirmation of the transaction which serves as proof of your transaction.
• Bitcoins can be used for purchasing items at the Online Stores/vendors offering the Bitcoin Payment System.

Cons:

• Confirmation of Transaction needs time and it is usually in between 30 minutes to 1 hour. You need to wait for Transaction Confirmation to get Transaction ID.
• There are no intermediates acting in between the transactions. I mean to say, “refunds” doesn’t work here. You have to request the seller to re-transfer / refund the bitcoins to your wallet bitcoin address.
• A Bitcoin wallet address is not operated by any government. The transactions are peer-to-peer i.e., in between users only.

In order to buy, sell, or receive a bitcoin, what you need is a “Bitcoin Wallet Address“. There are numerous sites from where you can get your own Bitcoin wallet address. The most widely used websites for Bitcoin are Local Bitcoins and Coin Base.

The below graph represents the growth and usage of Bitcoin Wallet Addresses every quarter.

You have to create an account on their sites so as to get your own Bitcoin wallet address. From then on, you can share your wallet address with your friends or the public so as to receive or collect bitcoins from them.

In a similar way, if you want to buy bitcoins, the seller will ask for a wallet address to transfer bitcoins to your wallet. The same procedure takes place during selling; you need to transfer the Bitcoin to the buyer’s wallet address upon confirmation of the transaction.

Do you know what a Bitcoin wallet address looks like? It is a 32-digit string mixed up with letters and numbers. It is not possible to remember the bitcoin wallet address of someone. Thus, you have to just copy down the wallet addresses depending on your needs.

A Bitcoin transaction takes place, usually within seconds, but you won’t get the transaction confirmation in the very next second. The Bitcoin transaction confirmation requires nearly 30 minutes to 1 hour of time.

Do you know why it takes time for confirmation? Bitcoin transactions are made by digitally exchanging heavily encrypted hash codes across a peer-to-peer (P2P) network. The P2P network monitors and verifies the transfer of Bitcoins between users. Monitoring and verification of transactions require a lot of time. Moreover, some hundreds to thousands of Bitcoin transaction occurs within second all over the world.

Thus, this process usually requires time. Bitcoin transactions are recorded in a publicly distributed ledger called the Blockchain, which uses bitcoin as its unit of account. Thus, you can verify and confirm the transaction at any time by using the sites providing Blockchain Info. You can even get the Transaction ID from such Blockchain Info-providing sites.

One of the best sites providing information on Bitcoin Transactions is BlockChain Info.