Who created Bitcoin?
Bitcoin is the first implementation of a concept called "crypto-currency", which was first put forward in 1998 by Wei Dai in the cypherpunks mailing list, suggesting the idea of a new form of money using cryptography to control their issuance and transactions , as opposed to relying on a central authority. The first specifications and validation of the concept were published in 2009 in a mailing list dedicated to cryptography by Satoshi Nakamoto. Satoshi left the project at the end of 2010 without saying much about his person. Since then, the community has grown exponentially, with many programmers working at Bitcoin.
Satoshi's anonymity has often raised unjustified concerns, many of them related to the misunderstanding of the open-source nature of Bitcoin. The Bitcoin protocol and software are freely published and any programmer in the world can see the code or make their own modified version of Bitcoin software. Like the current programmers, Satoshi's influence was limited by the fact that the changes made by him had to be adopted by others, and because of this he had no control over Bitcoin. As such, the identity of Bitcoin inventor is probably as relevant today as the identity of the person who invented the paper.
Who controls the Bitcoin network?
No one controls the Bitcoin network as no one owns the technology behind the email. Bitcoin is controlled by all Bitcoin users around the world. While programmers are improving software, they can not force a change in the Bitcoin protocol because all users are free to choose which software and version to use. To stay compatible with each other, all users must use software that complies with the same rules. Bitcoin can work correctly only when there is consensus among all users. So, all users and programmers have a strong motivation to protect this consensus.
How does Bitcoin work?
From the perspective of a regular user, Bitcoin is nothing more than a phone application or a computer program that offers a Bitcoin personal wallet and allows a user to send and receive bitcoins through it. This is how Bitcoin works for most users.
Behind the scenes, the Bitcoin network distributes a public register called the "block of blocks." This registry contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by the digital signatures that correspond to the addresses where the bithocks were sent, allowing all users to have full control over the bitcoins sending from their personal Bitcoin addresses. Additionally, anyone can process transactions using the computational power of specialized hardware and be rewarded with bitcoins for this service. This is often referred to as "mined". To learn more about Bitcoin, see the dedicated page and the original work.
Freedom of payments - You may send and receive any amount of instant money anywhere in the world at any time. No days when the banks are closed. No limits imposed. Bitcoin allows its users to have full control over their money.
Very low taxes - Bitcoin payments are currently processed either without taxes or with very low taxes. Users may optionally include a fee to take priority in processing the transaction, resulting in a faster confirmation of transactions by the network. Additionally, there are commercial processors assisting traders in processing transactions, changing bitcoins in a hard currency, and daily depositing funds directly into the merchant's bank account. These services are based on Bitcoin, they can be offered at much lower fees than PayPal or credit card networks.
Fewer risks for traders - Bitcoin transactions are safe, irreversible, and do not contain customer information. This protects merchants from damage caused by fraudulent fraud or chargebacks, and PCI compliance is not required. Traders can easily expand to new markets where credit cards are not available or fraud rates are unacceptably high. Net results are lower taxes, wider markets and lower administrative costs.
Security and control - Bitcoin users have total control over transactions; it is impossible for traders to force undue or hidden charges or payments as might happen through other methods of payment. Bitcoin payments can be made without personal information being linked to the transaction. This provides increased protection against identity theft. Those who use Bitcoin can also protect their money by backing up and encrypting.
Transparent and neutral - All Bitcoin money information is available at any time in the chain of blocks that can be checked by anyone and used in real time. No individual or organization can control or manipulate the Bitcoin protocol because it is secure from a cryptographic point of view. This allows Bitcoin to be completely neutral, transparent and predictable.
What are the disadvantages of Bitcoin?
Acceptance - Many people still have not heard of Bitcoin. Every day, more and more businesses accept bitcoins because they want the benefits associated with it, but the list is still small and needs to grow to benefit from the network effect.
Volatility - The total bithole value in circulation and the number of companies using Bitcoin is still very small compared to what it might be. So, relatively small events, speculation, or the activities of certain firms can greatly influence the price. In theory, this volatility will shrink as Bitcoin markets and technology will mature. There has never been such a coin, so it is quite difficult (and thrilling) to imagine what will happen.
Continuous development - Bitcoin software is still in a beta stage with many incomplete options still in active development. New tools, options and services are being developed to make Bitcoin safer and more accessible to the masses. Some of them are still not ready for everyone. Most Bitcoin-based businesses are in the beginning and do not yet provide any insurance. Generally, Bitcoin is still in the maturation phase.
Why do people trust Bitcoin?
Most of the people's trust in Bitcoin comes from the fact that it does not require any trust. Bitcoin is entirely open source and decentralized. This means that anyone who has access to the entire source code at any time. Any programmer in the world can then verify exactly how Bitcoin works. All real-life bitcoons and all transactions can be viewed in real-time by everyone. All payments can be made without the involvement of a third party and the system is protected by very powerful cryptographic algorithms that are similar to those used in online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all users are trustworthy.
Posted by The Activist.
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