Overview

17/10/18 04:43 UTC-4

Bitcoin, as a decentralized payment system

Decentralized payment Bitcoin system
Decentralized payment Bitcoin system

Bitcoin combines two words – "bit" and "coin". These two expressions are key to the world of digital technology and the financial sphere.

 

Work principles

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.

Interesting in the section: Lightning network and new opportunities

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.

Interesting in the section: Trezor hardware wallet. Advantages and disadvantages

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

#Bitcoin #BTC #cryptocurrency

Comments

Similar

10/05/19 07:27 UTC-4

Cryptocurrencies in Germany: financial geography

Cryptocurrencies in Germany are becoming increasingly popular. In March last year, the German Ministry of Finance recognized Bitcoin and other Altcoins as “official means of payment”. Since then, the popularity of Bitcoin and crypto payments has increased several times.

12/04/19 06:30 UTC-4

Financial geography. Cryptocurrencies in Sweden

Sweden, a northern European country, as well as neighboring Denmark, became a haven for cryptocurrency. The country has the lowest utilization rate of paper money, and therefore it was incredibly easy to accept digital assets for residents of Sweden.