Bitcoin is the first crypto asset, launched in 2009, and is the most popular. This is because Bitcoin has only 21 million Bitcoins in circulation, and there will be no more.
History of Bitcoin
Bitcoin was created by Satoshi Nakamoto, an individual or group whose identity has not yet been revealed.
In 2008 Satoshi Nakamoto published the whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System,” which describes using Blockchain technology to create a decentralized electronic payment system.
Bitcoin was officially launched in January 2009 and became the first crypto asset to use Blockchain technology.
Initially, the Bitcoin price was meager, and only a few people believed in Bitcoin.
The popularity of Bitcoin increased in 2013 as the price increased dramatically. In 2017 the price of Bitcoin peaked at around $20,000 per Bitcoin.
Currently, Bitcoin is becoming very popular and appreciated. This is because Bitcoin offers higher security. Besides that, Bitcoin does not depend on third parties.
How Bitcoin Work
Bitcoin uses a proof-of-work consensus algorithm. The smallest denomination of each Bitcoin is called a Satoshi, and each Satoshi is equivalent to one hundred millionths of one Bitcoin.
Then, how does Bitcoin work?
1. Blockchain
Bitcoin uses Blockchain technology to record transactions in a decentralized manner.
All Bitcoin transactions are recorded in interconnected and encrypted blocks using complex cryptographic algorithms.
Each new block added to the Blockchain must validate the previous blocks. This makes transactions challenging to change.
2. Mining
Bitcoin uses the mining concept to validate new transactions and add new blocks to the Blockchain.
This mining process is carried out by miners, where a miner provides computational power to find complex mathematical solutions.
When the solution has been found, the miner will be rewarded with several Bitcoins.
3. Private Key and Public Key
Bitcoin uses a private key and public key system to ensure its security.
The private key is secret and functions to send and sign transactions and validate Bitcoin ownership stored in specific public key addresses.
If an unauthorized person knows the private key, then an unauthorized party can take the Bitcoin stored in the public key address. Therefore the private key must be kept confidential.
Unlike the private key, the public key is public or general because it can be shared with anyone without security risk.
The public key is displayed in an alphanumeric form which functions to receive, validate and add transactions to the Blockchain.
The Future of Bitcoin
1. Increased Adoption
In the future, the use of Bitcoin is expected to increase and be increasingly used by many people.
One factor that influences it is that Bitcoin has high security and anonymity, so it guarantees the privacy of its users.
2. Faster and More Efficient Transactions
Bitcoin can be used to develop a more secure and efficient payment system for making international transactions without going through a third party.
This is because Bitcoin transactions are real-time and can reduce costs and the time needed.
3. Solution to Privacy and Data Security Problems
Bitcoin is a solution to privacy and data security problems because Bitcoin transactions are carried out anonymously and are not easy to track.
Bitcoin protects individuals and companies who wish to protect the privacy and security of their data.
Conclusion:
1. Bitcoin is the first and most popular crypto asset, launched in 2009 by Satoshi Nakamoto.
2. Bitcoin uses Blockchain technology to record transactions in a decentralized manner. Bitcoin uses the concept of miners, or what is known as mining, to validate new transactions.
3. Bitcoin uses private and public keys to access Bitcoin. The private key is secret, and the public key is shared.
In the following material, you will study and discuss basic learning materials regarding other crypto assets, namely “Ethereum and Altcoins.”