Introduction 

Bitcoin is a decentralized cryptocurrency. But what is a cryptocurrency? While any currency is a system for storing and transferring value, a cryptocurrency has the additional property that the notion of ownership of its units is established using cryptography. In the Bitcoin system, the transfer of bitcoins between entities requires the sender to provide a digital signature proving ownership of the bitcoins being transferred. So what about the decentralized part? Bitcoin is a decentralized system because the creation of new bitcoins and the recording of all bitcoin transactions is performed by a peer-to-peer (P2P) network. Anyone can join the Bitcoin network by running open-source software freely available on the Internet. The Bitcoin system provides the infrastructure necessary for enabling transactions between entities. This infrastructure consists of the following:

 • A system for generating addresses where bitcoins can be received and stored. 

• A method for ensuring that only the rightful owner of bitcoins stored in an address can move them to a new address. 

• A database of all past transactions which is used to prevent double spending of the bitcoins stored in an address. This database is called the blockchain. 

The main innovation in Bitcoin is that the maintenance of the blockchain database is linked to the creation of new bitcoins. The blockchain consists of a linked list or chain of blocks where each block contains a set of transactions. Blocks are appended to the blockchain one at a time where each addition requires finding a solution to a computationally hard search problem. Nodes in the Bitcoin network which successfully add a block to the blockchain are rewarded with new bitcoins. Such nodes are called miners and their search for solutions of the computationally hard problems is called mining

History

It’s late 2008, and the global financial crisis is causing shock waves around the world. Anger at the worldwide banking industry, governments and other centralized authorities has reached fever pitch. Enter a mysterious figure named Satoshi Nakamoto, whose real identity continues to remain shrouded in mystery to this day. Satoshi authors and releases a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System. The paper shared the workings for a new digital currency system that didn’t rely on banks to facilitate transactions or governments to create and disseminate the currency. Shortly after its release it is studied by members of the Cypherpunk group and found to be extremely

promising. In January 2009, the first transaction took place between Satoshi and Hal Finney, a developer and prominent member of the Cypherpunk movement. And the rest is history. Today, almost everyone has heard about Bitcoin and its value has skyrocketed. Even more profoundly, the Bitcoin currency along with its core blockchain operating technology has managed to propel a decentralized revolution around the world. For a complete timeline of Bitcoin from 2007 onwards, visit http://historyofbitcoin.org/

Need of Creating a bitcoin currency

Distrust of financial institutions

•Any noncash transaction requires a trusted third-party administrator—commonly a bank or financial service provider.

•The system forces participants to trust financial institutions that are not always trustworthy.

Transaction costs

•Traditional payments are revocable, even on irrevocable services.

•Financial institutions act as an arbitrator between counterparties in disputed claims.

•Arbitration costs are passed on to consumers.

Transaction security

•Two levels of verification

–Source is legitimate

–Coins are legitimate

•Public/private key verification ensures the legitimacy

Bitcoin vs. bitcoins

•Bitcoin is the system

•bitcoins are the units

BTC Price Statistics

 Bitcoin has a circulating supply of 19 Million BTC coins and a total supply of 21 Million.

We can see price statistics in the following image.

How to guard your Bitcoin?

While executing coins, you would normally be doing it on your PC. Since your PC is associated with the web, it can possibly be tainted by malware or spywares which could think twice about reserves.

Equipment wallets, for example, Trezor and Record are emphatically supported in alleviating that gamble. These are outside gadgets that seem to be USB sticks. An equipment wallet gets your confidential key that holds your Bitcoin into an outer gadget beyond your PC. At the point when you expect to execute, you would associate the equipment wallet into your PC, and all the vital marking to execute would be finished in the actual equipment beyond your PC.

Be that as it may, on the off chance that you truly lose your equipment wallet without a key expression reinforcement, there could be no alternate approach to recuperating your assets of all time. As such while setting up your equipment wallet, consistently make sure to keep a duplicate of the critical expression and put it someplace protected from fire or flood.

Bitcoin Splitting

Bitcoin Splitting or now and again otherwise called the Halvening, alludes to the decrease of block award to diggers considerably. This is essential for its implicit money related strategy, in which after roughly 4 years, the mining award will be divided towards the restricted covered supply of 21 million Bitcoin. When 21 million of Bitcoin have been stamped, there will as of now not be a new stockpile of it compensated to diggers, and excavators are supposed to acquire income via exchange expenses.

This is viewed as a huge occasion for two or three reasons. Right off the bat, merchants might estimate the conceivable shortage of Bitcoin clearing a path to high unpredictability. Furthermore, as diggers’ prices will be decreased, we might see a few excavators leaving the market as they couldn’t support the lower productivity. This thus may cause the hashing rate to diminish and mining pools might merge. Because of this, the bitcoin organization might be somewhat temperamental during the dividing time frame.

Is Bitcoin a wise investment?

We don’t give vent to exhortation. The cost of bitcoin got going as nothing and advanced toward the market cost you see today. Apparently the market is setting an incentive for the accompanying reasons.

Computerized Gold – It is a suitable advanced store of significant worth because of its advanced shortage

Installment – Practically moment and minimal expense exchange with anybody on the web

Hypothesis – This might be because of shortcoming on the lookout, however there are individuals hypothesizing that Bitcoin might be the resource class representing things to come

That being said, Bitcoin accompanies gambles. To decide for yourself on the off chance that it is a wise speculation, it is vital to figure out the gamble and just contribute the sum that you are open to losing.

There is a likelihood of Bitcoin value going to nothing. This can occur assuming the undertaking fizzles, a basic programming bug is found, or there are fresher, more creative computerized monetary forms that would assume control over its place. Assuming you review Bitcoin was worth almost $20,000 in sixteenth December 2017. However, on seventeenth December 2018, the cost of Bitcoin was at its low of about $3,200. Bitcoin is a profoundly unpredictable resource class and requires a high gamble hunger.

However much Bitcoin is a computerized gold, it has just been around for around 10 years. In contrast with gold which has been a well known store of significant worth for many years.

Conclusion 

In this article we try to put our opinion to readers about Bitcoin technology and its framework to understand Bitcoin from the perspectives of both economic theory and cryptography. In short,we hope that you now really understand what Bitcoin is and how it works.

We are NOT recommending Bitcoin as an investment. Naturally, our guide will help readers make a more informed decision, but we are not here making any prediction about the market value of bitcoins relative to State issued currencies over the next few years.