Why Bitcoin Price is going up?
Cryptocurrency emerged as a side product of another invention. Satoshi Nakamoto, the unknown inventor of Bitcoin, the first and still most important cryptocurrency, never intended to invent a currency. “A Peer-to-Peer Electronic Cash System in another word we can called as digital cash.
Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It’s completely decentralized with no server or central authority.
To realize digital cash you need a payment network with accounts, balances, and transaction. That‘s easy to understand. One major problem every payment network has to solve is to prevent the so-called double spending: to prevent that one entity spends the same amount twice. Usually, this is done by a central server who keeps record about the balances.
So you need every single entity of the network to do this job. Every peer in the network needs to have a list with all transactions to check if future transactions are valid or an attempt to double spend.
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Introduction to Blockchain Technology
Blockchain (BC), the technology behind Bitcoin crypto-currency system, is considered to be essential for forming the backbone for ensuring enhanced security and privacy for various applications in many other domains including the Internet of Things (IoT) eco-system.
why bitcoin price is going up based alot of Trading Fluctuations across the world
Bitcoin is a peer-to-peer electronic payments system, also known as a cryptocurrency, that allows people to make instant, anonymous transactions online. The unique characteristic of bitcoin is that it records every single transaction made on its network in a public record.
This is known as the “blockchain”. Currently, most people use a trusted middleman such as a bank to make a transaction. But blockchain allows consumers and suppliers to connect directly, removing the need for a third party. Using cryptography to keep exchanges secure, blockchain provides a decentralized database, or “digital ledger”, of transactions that everyone on the network can see.
This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded. In theory, if blockchain goes mainstream, anyone with access to the internet would be able to use it to make transactions.
Currently only a very small proportion of global GDP (around 0.025%, or $20 billion) is held in the blockchain, according to a survey by the World Economic Forum’s Global Agenda Council. But the Forum’s research suggests this will increase significantly in the next decade, as banks, insurers, and tech firms see the technology as a way to speed up settlements and cut costs.
Companies racing to adapt blockchain include UBS, Microsoft, IBM, and PwC. The Bank of Canada is also experimenting with the technology. A report from financial technology consultant Aite estimated that banks spent $75 million last year on blockchain. And Silicon Valley venture capitalists are also queuing up to back it.
Cryptocurrency is designed from the ground up to take advantage of the internet and how it works. Instead of relying on traditional financial institutions who verify and guarantee your transactions, cryptocurrency transactions are verified by the user’s computers logged into the currency’s network. Since the currency is protected and encrypted, it becomes impossible to increase the money supply over a predefined algorithmic rate. All users are aware of the algorithmic rate. Therefore, since each algorithm has a roof limit, no cryptocurrency can be produced or “mined” beyond that.
Since Cryptocurrency is completely in the cloud, it does not attain a physical form but has a digital value, and can be used for the digital equivalent of cash in a steadily increasing number of retailers and other businesses. Bitcoin was the first cryptocurrency that was ever created, and while there is a small fee for every cryptocurrency transaction, it is still considerably lesser than the usual credit card processing fees.
Bitcoin is the most popular cryptocurrency which has seen massive success. There are other cryptocurrencies such as Ripple, Litecoin, Peercoin, etc. for people to transact in. But for every successful cryptocurrency, there are others that have died a slow death because no one bothered to use them, and a cryptocurrency is only as strong as its users.
Cryptocurrency can be converted into other forms of currency and deposited into user’s accounts at a lightning speed Most cryptocurrencies can be transacted anonymously and can be used as discreet online cash anywhere in the world. Users, therefore, do not have to pay for any currency conversion fees. While not 100% immune from theft, Cryptocurrency is generally safe to use and difficult for malicious hackers to break. Bitcoin and other Cryptocurrency can be saved offline either in a “paper” wallet or on a removable storage hard drive which can be disconnected from the internet when not in use
Cryptocurrency’s technical foundations date back to the early 1980s when an American cryptographer named David Chaum invented a “blinding” algorithm that remains central to modern web-based encryption. The algorithm allowed for secure, unalterable information exchanges between parties, laying the groundwork for future electronic currency transfers.
This was known as “blinded money.”By the late 1980s, Chaum enlisted a handful of other cryptocurrency enthusiasts in an attempt to commercialize the concept of blinded money. After relocating to the Netherlands, he founded DigiCash, a for-profit company that produced units of currency based on the blinding algorithm. Unlike Bitcoin and most other modern cryptocurrenncies, DigiCash’s control wasn’t decentralized.
Chaum’s company had a monopoly on supply control, similar to central banks’ monopoly on fiat currencies.DigiCash initially dealt directly with individuals, but the Netherlands’ central bank cried foul and quashed this idea. Faced with an ultimatum, DigiCash agreed to sell only to licensed banks, seriously curtailing its market potential.
Microsoft later approached DigiCash about a potentially lucrative partnership that would have permitted early Windows users to make purchases in its currency, but the two companies couldn’t agree on terms, and DigiCash went belly-up in the late 1990s. Around the same time, an accomplished software engineer named Wei Dai published a white paper on b-money, a virtual currency architecture that included many of the basic components of modern cryptocurrencies, such as complex anonymity protection and decentralization.
However, b-money was never deployed as a means of exchange. Shortly thereafter, a Chaum associate named Nick Szabo developed and released a cryptocurrency called Bit Gold, which was notable for using the blockchain system that underpins most modern cryptocurrencies. Like DigiCash, Bit Gold never gained popular traction and is no longer used as a means of exchange.
Pre-Bitcoin Virtual Currencies
After DigiCash, much of the research and investment in electronic financial transactions shifted to more conventional, though digital, intermediaries, such as PayPal (itself a harbinger of mobile payment technologies that have exploded in popularity over the past 10 years).
A handful of DigiCash imitators, such as Russia’s WebMoney, sprang up in other parts of the world.. In the United States, the most notable virtual currency of the late 1990s and 2000s was known as e-gold. e-gold was created and controlled by a Florida-based company of the same name. e-gold, the company, basically functioned as a digital gold buyer.
Its customers, or users, sent their old jewelry, trinkets, and coins to e-gold’s warehouse, receiving digital “e-gold” – units of currency denominated in ounces of gold. e-gold users could then trade their holdings with other users, cash out for physical gold, or exchange their e-gold for U.S. dollars.