Katalatto Explains: Bitcoin
Bitcoin is a decentralized digital currency that enables instant payments to anyone, anywhere in the world. It was invented by programmer under nickname Satoshi Nakamoto. Bitcoin uses peer-to-peer technology to operate with no central authority: transaction management and money issuance are carried out collectively by the network.
Bitcoin uses peer-to-peer technology to operate with no central authority: transaction management and money issuance are carried out collectively by the network.
Bitcoin uses public-key cryptography, peer-to-peer networking, and proof-of-work to process and verify payments. Bitcoins are sent (or signed over) from one address to another with each user potentially having many, many addresses. Each payment transaction is broadcast to the network and included in the blockchain so that the included bitcoins cannot be spent twice. After an hour or two, each transaction is locked in time by the massive amount of processing power that continues to extend the blockchain. Using these techniques, Bitcoin provides a fast and extremely reliable payment network that anyone can use.
Bitcoins are sent easily through the Internet, without needing to trust any third party. Transactions are irreversible by design, they are ultra fast whereas funds received are available for spending within minutes. Cost very little, especially compared to other payment networks.
6 features that make Bitcoin such unique:
- Bitcoin made mobile payments easy
Bitcoin on mobiles allows an individual to pay with a simple two step scan-and-pay. No need to sign up, swipe card, type a PIN, or sign anything. All is a need to receive Bitcoin payments is to display the QR code in the Bitcoin wallet app and let a friend of yours scan your mobile, or touch the two phones together (using NFC radio technology)
2. Security and control over your money
Bitcoin transactions are secured by military grade cryptography. Nobody can charge you money or make a payment on your behalf. So long as you take the required steps to protect your wallet, Bitcoin can give you control over your money and a strong level of protection against many types of fraud.
3. Works everywhere, anytime
Just like with email, you don’t need to ask your family to use the same software or the same service providers. Just let them stick to their own favorites.
4. Fast international payments
Sending bitcoins across borders is as easy as sending them across the street. There are no banks to make you wait three business days, no extra fees for making an international transfer, and no special limitations on the minimum or maximum amount you can send.
5. You may choose your own fees
There is no fee to receive bitcoins, and many wallets let you control how large a fee to pay when spending. Most wallets have reasonable default fees, and higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred, so it’s possible to send 100,000 bitcoins for the same fee it costs to send 1 bitcoin.
6. Identity protection
With Bitcoin, there is no credit card number that some malicious actor can collect in order to impersonate you. In fact, it is even possible to send a payment without revealing your identity, almost like with physical money. You should, however, take note that some effort can be required to protect your privacy.