Bitcoin combines two words – "bit" and "coin". These two expressions are key to the world of digital technology and the financial sphere.
The most common Bitcoin definition can be associated with the concept of "decentralized payment system", which uses Bitcoin as a unit of measure and operates based on a technology called Blockchain. In turn, Blockchain is the continuous work of computing power of computers to create blocks with information, for the protection of which cryptographic methods are used. At the same time, electronic payments within the Blockchain are publicly available to all participants of the system and occur almost instantly.
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The exchange of digital data between two stakeholders occurs without the participation of intermediaries and, as a rule, irreversible. That is, until there is no mechanism for canceling the transaction. Unfortunately, this can lead to loss of information if you make a mistake in the address of the recipient or unauthorized persons will have access to the electronic signature of the wallet owner. Undeniable advantage of the Blockchain network is the inability to block or seize the cryptocurrency from third parties.
a decentralized payment system
More recently, Bitcoins have been actively used for mutual settlements for goods or services. Also, their exchange for traditional currencies through special exchange offices is established. Due to the increased popularity of the new type of financial transactions, processing of transactions required additional time. To solve this problem, you can use the recommended commission, after which your transaction will become more priority for implementation.
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We have already mentioned that Blockchain is based on a special program with a public initial code, which means complete decentralization and lack of control by the state. A computer system connected to a peer-to-peer network operates due to the computing power of many computers.
By analogy with traditional currencies, Bitcoin received the financial abbreviation BTC. To date, this payment system provides the possibility of free money transfers, which to a certain extent makes it an alternative to conventional banking operations.
Editor: Yuliya Soroka