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Bitcoin currency information

Cryptocurrencies

The term cryptocurrency refers to digital money that can be bought, transferred, or sold securely using encryption, which protects data used to help identify and track cryptocurrency transactions, such as bitcoin. Found in tangible form or backed by something tangible such as gold, the cryptocurrency is purely digital money and exists only on the Internet, and the encrypted currency, also known as crypto coin, is not backed or managed by a third party, such as a bank or government, This means that cryptocurrency exists as a secure and decentralized form of currency, and is verified by a network of computers.

Definition of Bitcoin

Bitcoin is defined as a digital cryptocurrency made up of processed data used in online purchases, it is limited and its value is determined by market forces, and it is traded like stocks on different exchanges, where Bitcoin is described as the first decentralized digital currency, It is a digital payment currency that uses cryptocurrency as a digital medium of exchange, so it is necessary to know information about bitcoin, as it is referred to as cash for the internet, and usually refers to the software and systems used in bitcoin, which means the actual currency.

It was created by an anonymous computer programmer or group of programmers known as Satoshi Nakamoto in 2009, and its owners can use various websites to exchange physical currencies; Like the US dollar or the euro, or exchange it with goods and services from a number of sellers, since it can act as a medium of exchange without relying on any financial institutions or governments, as it relies on public-key cryptography, where users have a public key available for everyone to view and a private key Only known to their computer.
Bitcoin currency information
Bitcoin currency information

Bitcoin network

 The Bitcoin network is defined as a peer-to-peer payment network that operates on a cryptographic protocol, in which users send and receive bitcoins, by broadcasting digitally signed messages on the network using a bitcoin cryptocurrency wallet software, and transactions are recorded in a public distributed and recursive database known as In the name of the blockchain, with the consensus being achieved through a proof-of-work system called mining, the network requires a minimal structure for the exchange of transactions, where a dedicated decentralized network suffices, through which messages are transmitted at the best possible effort, and the network can be left and rejoined upon re-entry contact, so it is necessary to know information about bitcoin.

Bitcoin currency history

Bitcoin is the largest cryptocurrency, as it was first introduced in 2009 and it is the most widely traded cryptocurrency, as it uses cryptography to control its transactions, rather than a central authority, so it is necessary to know information about the Bitcoin currency before you start using it, as The date of its establishment will be explained as follows:

Beginning of Bitcoin

The domain name bitcoin.org was registered on August 18, 2008, and on October 31, 2008, a link was published to a paper authored by Satoshi Nakamoto entitled Bitcoin i.e. Peer-to-Peer Electronic Cash System to Crypto Mailing List, Nakamoto implemented Bitcoin as open-source code and released it at January 2009, and on January 3, 2009, the bitcoin network was created when Nakamoto mined the first block of the chain, known as the genesis block. The recipient of the first bitcoin transaction was cypherpunk Hal Finney, who created the first reusable Proof of Work system in 2004, and on January 12, 2009, received ten bitcoins from Nakamoto.

From 2011-2012

After the early proof-of-concept transactions, the first major users of bitcoin were black markets, and starting in February 2011, Silk Road exclusively accepted bitcoin as payment, with $9.9 million worth of bitcoins being traded, worth about $214 million, and in 2011 The price started at $0.30 per bitcoin and rose to 5.27, and in 2012 bitcoin prices started at $5.27, rising to $13.30.

From 2013-to 2016

In 2013, prices started from $13.30 and rose to $770 by January 1, 2014, in March 2013, the blockchain was temporarily split into two independent chains with different rules due to a bug in Bitcoin version 0.8, where the two primary lists run simultaneously For six hours, each with their own version of the transaction history from the moment of the split, normal operation was restored when the majority of the network was downgraded to version 0.7 of the bitcoin software. In 2014, prices started at $770 and dropped to $314, while in 2015, Prices started at $314 and went up to $434, and in 2016, prices went up to $998 on January 1, 2017.

From the year 2017-to 2019

Prices started at $998 in 2017 and rose to $13,412.44 on January 1, 2018, after hitting an all-time high of $19.783.06 on December 17, 2017, and China banned bitcoin trading, with the first steps taken in September 2017, and a complete ban that started on February 1, 2018. Then, the bitcoin price dropped from $9,052 to $6,914 on February 5, as the price of bitcoin fluctuated between $11,480 and $5,848, and on July 1, 2018, the price of bitcoin was $6,343, down 72 % for 2018, down 81% since its all-time high, and in September 2019 Intercontinental Exchange, owner of the New York Stock Exchange, began trading bitcoin.

Bitcoin

Bitcoin is defined as a decentralized cryptocurrency without a central bank or a single administrator that can be sent from a user to a user without the need for intermediaries, so it is necessary to know information about the Bitcoin currency, as transactions are verified through network nodes through encryption and recorded in a ledger A distributed ledger known as the blockchain, has been criticized for its use in illegal transactions, high electricity consumption, price volatility, and thefts from stock exchanges, some economists have described it as a speculative bubble and has been used as an investment, although many regulators have issued alerts to investors About it, and the following will explain information about the Bitcoin currency and the issues related to it:

Bitcoin Transactions

There are no physical Bitcoins, only balances kept in the public ledger in the cloud, which along with all Bitcoin transactions are verified with a huge amount of computing power, Bitcoins are not issued or backed by any banks or governments, and Bitcoins are not Individuality is a value as a commodity, and among the most important transactions that Bitcoin offers are the following:
  • Actual Bitcoin transaction including fees from a web-based cryptocurrency exchange to a hardware wallet.
  • The best chain consists of the longest chain of transaction logs from the configuration block to the current block or log.
  • Bitcoin is defined by a series of digitally signed transactions that began with the creation of Bitcoin.
  • It can be handled individually as transactions are allowed to contain multiple inputs and outputs, allowing bitcoins to be split and merged.

Regulatory issues

To know the most important information about Bitcoin, it is necessary to know the regulatory issues related to it. On March 18, 2013, the Financial Crimes Enforcement Network issued a report regarding virtual currencies and their legal status within the financial services business, and the regulations of the Banking Secrecy Act, where digital currencies such as Bitcoin were classified as Virtual currencies, because they are not legal tender under any jurisdiction, as a person is an exchanger and a money transmitter if the person accepts this convertible virtual currency from one person and sends to another person as part of the acceptance and transfer of currency, money or any other value of an alternative currency Bitcoins are traded in traditional currencies to detect large transactions and suspicious activity, money laundering, and gather information about their customers.

tax and regulation

The collection of information about bitcoin includes tax and regulatory matters where it focuses on the importance of taxpayers to determine whether taxes are due on a transaction related to the currency, when a taxpayer has provided a service in exchange for bitcoin, there is likely to be a verification event and any profit or loss may be calculated Using fair market values ​​for the service provided, the German Ministry of Finance described bitcoin as a unit of account, usable in multilateral circles and subject to capital gains tax if held for less than one year, while the People's Bank of China announced that individuals in China are allowed to trade and exchange bitcoins. freely as a commodity, while Chinese financial banks are prohibited from operating with bitcoins or using fiat currency.

How Bitcoin works

Bitcoin is defined as a purely digital phenomenon, consisting of a set of protocols and processes, through the use of cryptography, it is a network that operates on a protocol known as the blockchain, where the blockchain consists of a single chain of separate blocks of information, arranged in chronological order, this information can be Any series of 1s and 0s, which means it may include emails, contracts, land titles, marriage certificates, or bond deals. Knowing about Bitcoin includes knowing how Bitcoin works, as follows:

Mining

The process of maintaining an untrusted public ledger is known as mining, as there is a network of miners who record these transactions on the blockchain, which underlies the network of bitcoin users who trade cryptocurrencies among themselves. Mining is difficult because the bitcoin software makes The process is artificially time-consuming, as people can do simulations to enrich themselves or bankrupt other people.

Retail

Knowing about Bitcoin involves how it works through hashing. A network of miners, scattered around the world and not connected to each other by personal or professional relationships, receive the latest batch of transaction data, running the data through a hash healing algorithm, which is A string of numbers and letters that validates the information but does not reveal the information itself. This technology allows the Bitcoin network to instantly validate the block.

Keys and wallets

Bitcoin ownership boils down to two numbers. The public key and private key, where the public key is like a username, the private key is like a password, and the hash of the public key is called an address and it is the one that is displayed on the blockchain, as using the hash provides an extra layer of security, and to receive bitcoin, it is enough for the sender to know the address as The public key is derived from the private key, and to access Bitcoin, a wallet can be used, which is a collection of keys that can take various forms, from third-party web applications that offer security and automated teller cards, to QR codes printed on pieces of paper, which is one of the most important things to know about Bitcoin.

Advantages of Bitcoin

Due to the unique nature of virtual currencies and after learning about Bitcoin, there are some features inherent in transactions through which users of other currencies do not get, as digital currencies are a new and untried medium of exchange, users should be careful to assess the benefits and risks The main advantages of Bitcoin are as follows:
  • User anonymity: Bitcoin purchases are separate, unless a user voluntarily posts their bitcoin transactions, their purchases will never be associated with their personal identity, just like cash-only purchases, and cannot be traced back to them.
  • No External Interruption: One of the most widely publicized advantages of Bitcoin is that governments, banks, and other financial intermediaries have no way to interrupt user transactions or freeze Bitcoin accounts.
  • Purchases not subject to tax: Since there is no way for third parties to identify, track, or intercept transactions, one of its main advantages is that no sales tax is added to any purchases.
  • Very Low Transaction Fees: Standard wire transfers and foreign purchases usually involve fees and exchange costs, but because bitcoin transactions do not have intermediary institutions or government involvement, transaction costs remain very low.
  • Online Payment: Bitcoin users can pay for their coins anywhere they have access to the internet, but unlike online payments made using bank accounts or credit cards, personal information is not necessary to complete any transaction.

Bitcoin Risks

After learning about bitcoin and knowing that it uses private key cryptography to verify owners and record transactions, scammers and scammers may try to sell fake bitcoins, and as with any investment, Bitcoin values ​​can fluctuate. Their short existence, given the mass-selling on exchanges, and if fewer people began to accept bitcoin as a currency, these digital units could lose their value and could become worthless, and since bitcoin is not eligible for inclusion in any tax-bearing retirement accounts, There are no good legal options to protect investments from taxes.

Ideas for using Bitcoin

The development of the cryptocurrency industry has gained great popularity, providing people with different ways to earn income, as there are many business opportunities that support the cryptocurrency industry, and after knowing information about the bitcoin currency, the following are ideas for using bitcoin:
  • Building decentralized applications.
  • Introducing cybersecurity tools around bitcoin transactions.
  • Start shopping regularly while using it in everyday transactions.
  • Hold on to cryptocurrencies as prices bounce back to a new level after the current market is over.
  • Provide bitcoin vending machines.
  • Building a real estate company or investing in real estate funds.
  • Bitcoin exchange service started.
  • Starting a Bitcoin Consulting Business.
  • Promote Blockchain Products Online Through Affiliate Marketing.
  • Building information websites about bitcoin.
  • He started a money transfer company using bitcoin.

How to buy bitcoin

After knowing information about the bitcoin currency, it is necessary to learn more about how to invest in it, as investing in cryptocurrencies is fraught with risks and speculation, so it is necessary to know the purpose of investing in it and how to do so, and the following will explain the needs required to buy bitcoin:
  • Digital Wallet: In order to perform transactions on the Bitcoin network, participants need to run a program called a wallet, since bitcoins are not technically coins, it seems correct that a bitcoin wallet will not actually be a wallet, instead of leather, wallets are made of of two unique and distinct encryption keys: a public key and a private key, and they mean the following:
  1. Public key: the location where transactions are deposited and withdrawn from, and it is also the key that appears on the blockchain ledger as a user's digital signature Private key: is the password required to buy, sell and trade bitcoin in a wallet.
  2. Personal Documents: The Securities and Exchange Commission requires users to verify their identities when registering with digital wallets as part of its anti-money laundering policy. social.
  • Secure Internet Connection: It is imperative to use discretion about when and where to access the digital wallet, as it is not recommended to trade Bitcoin on unsecured or public wifi as this may make the user more vulnerable to attacks from hackers.
  • Bank account, debit card or credit card: When exchanging any currency for bitcoin, funds are required to conduct these transactions, as bitcoin wallets can connect directly to the bank account, debit card or credit card.
  • Bitcoin exchange: After setting up the wallet using the payment method, users can buy bitcoins and other cryptocurrencies from electronic markets called exchanges.
  • Similar to the platforms that traders use to buy stocks, the exchanges communicate directly with the bitcoin market, where traditional currencies can be exchanged for bitcoin.

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