What do I need to know about bitcoin? How it works
It is important to begin with the fact that bitcoin is a decentralised system, which operates on the basis of a specialised protocol. And it is designed to allow users to exchange directly with each other, without any intermediaries.
An important feature is the complete anonymity and immediacy of the blockchain technology. But all transfer records are stored in a registry. And in general, the information is checked on a regular basis.
In most cases, the unit of the same name is used for settlement. It is the first system of its kind and has been the largest on the market since its inception.
An added advantage is that it is operated without any additional regulator or Central Bank, so all transactions take place in a very short time, and security is not compromised, everything is secured. But it is important to keep in mind that no one can control the currency, block it or cancel the transfer.
Digital currency innovation
As said, bitcoin is a digital payment system. It is the first to appear in the world, and in doing so, it is open source. And the main breakthrough, as well as the value of this project, lies in having a full-fledged digital currency that is not only decentralised, but also self-sufficient.
For example, if you compare it to any financial institution, say a bank, then here everything is closed and the user has no access to almost any data. You have to blindly trust the company and there is nothing else to do. But it is important to consider that there is always the risk of error, fraud and so on.
As for bitcoin, there are no such problems because the structure is decentralized, i.e. the participants fully support it, and there is no need for a central operator. Balances are public, but it is possible to hide it. The network protocol, however, has additional mechanisms that routinely verify the correctness of the data.
The currency network itself consists of nodes that are linked into a single PC network where special software is installed.
The value of cryptocurrency
This is not the usual money used for transfers, but rather a specialised currency. The main function is to transfer value on the Internet. And it is possible to calculate this value in whatever form is convenient. And that is how the value of bitcoin is formed. Another plus is that it is up to the investors or users to decide the price, the government is not even involved.
