What Is Bitcoin?
The first and mostly traded cryptocurrency Bitcoin is a digital currency founded in 2009 which was developed by Satoshi Nakamoto, believed to be a pseudonym for an individual or a group of people whose identity remains unknown.
History Of Bitcoin?
The domain 'bitcoin.org' was registered in 2008, also the first paper on Bitcoin titled "A Peer-to-Peer Electronic Cash System" published later in the same year. The Bitcoin network came into existence in early 2009 along with an open source client hosted on SourceForge.
Roadmap of Bitcoin
- 2008 - Whitepaper - Satoshi Nakamoto published the Bitcoin whitepaper
- 2009 - Genesis Block - Bitcoin's genesis block is mined
- 2011 - M-of-N Standard Transactions - BIP 011 implemented M-of-N-signatures required transactions as a new 'standard' transaction type. This BIP enabled secured wallets, escrow transactions, and other use cases where redeeming funds requires more than a single signature.
- 2012 - Pay to Script Hash - BIP 016, building off of BIP 013, which introduced Pay to Script Hash address types, implemented a new "standard" transaction type for the Bitcoin scripting system and defined additional validation rules that apply only to the new transactions.
- 2012 - Hierarchical Deterministic Wallets - BIP 032 introduced Hierarchical Deterministic Wallets ("HD Wallets"), wallets that can be shared partially or entirely with different systems, each with or without the ability to spend coins. HD wallets allow for numerous cryptocurrency wallets (public-private key pairs) to be generated from a single seed phrase.
- 2014 - A Finite Supply for Bitcoin - BIP 042 introduced a finite supply for Bitcoin. After discovering a bug that would allow Bitcoin's money supply to grow indefinitely, forever, developers introduced a hard cap for Bitcoin.
- 2014 - OP_CHECKLOCKTIMEVERIFY - BIP 065 introduced a new opcode (OP_CHECKLOCKTIMEVERIFY) for the Bitcoin scripting system that allows a transaction output to be made unspendable until some point in the future. This was a fundamental addition paving the way for payment channels.
- 2015 - CHECKSEQUENCEVERIFY - BIP 112 implemented a new opcode (CHECKSEQUENCEVERIFY) for the Bitcoin scripting system that in combination with BIP 68 allows execution pathways of a script to be restricted based on the age of the output being spent.
- 2017 - SegWit (User Activated Soft Fork) - This plan was proposed as BIP 148, a Bitcoin Improvement Proposal, from a pseudonymous developer named Shaolinfry. It was proposed in reaction to a plan referred to as "Segwit2x" which was an agreement among miners, developers, businesses, and investors to support SegWit (a soft fork) and a 2MB block size (hard fork). Users rejected this proposal and deployed a user-activated soft fork in a demonstration that users controlled the Bitcoin network.
- BIP 141 defined a new structure called a "witness" that is committed to blocks separately from the transaction Merkle tree. This structure contains data required to check transaction validity but not required to determine transaction effects. In particular, scripts and signatures are moved into this new structure.
- BIP 143 defines a new transaction digest algorithm for signature verification in version 0 witness program, in order to minimize redundant data hashing in verification and to cover the input value by the signature
- BIP 147 proposed changes to the Bitcoin transaction validity rules to fix a malleability vector in the extra stack element consumed by OP_CHECKMULTISIG and OP_CHECKMULTISIGVERIFY
- BIP 148 Defined soft fork flag day activation of the segregated witness deployment known as "segwit". Activated BIP141, BIP143, and BIP147. The date was set for August 1, 2017, when users would decide whether or not to deploy SegWit.
Where To Buy Bitcoin?
Being the first and most popular crypto currency, Bitcoin is being offered by almost all crypto exchanges such as Binance, Coinbase, Gemini etc. and also on some traditional stockbrokers such as Robinhood. There are few more options to buy Bitcoin such as ATMs, peer-to-peer exchanging, echange traded funds (ETFs), Grayscale funds etc.
Frquently Asked Questions
- Who controls the Bitcoin network?
- Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world.
- How does Bitcoin work?
- Bitcoin network is sharing a public ledger called the "block chain". This ledger 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 digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This is often called "mining".
- Is Bitcoin really used by people?
- There are a growing number of businesses and individuals using Bitcoin. This includes brick-and-mortar businesses like restaurants, apartments, and law firms, as well as popular online services such as Namecheap and Overstock.com.
- How does one acquire bitcoins?
- As payment for goods or services.
- Purchase bitcoins at a Bitcoin exchange.
- Exchange bitcoins with someone near you.
- Earn bitcoins through competitive mining.
- What are the advantages of Bitcoin?
- Payment freedom
- Choose your own fees
- Fewer risks for merchants
- Security and control
- Transparent and neutral
- What are the disadvantages of Bitcoin?
- Degree of acceptance
- Volatility
- Ongoing development
- Is Bitcoin legal?
- Bitcoin has not been made illegal by legislation in most jurisdictions.
- Is Bitcoin useful for illegal activities?
- Bitcoin is money, and money has always been used both for legal and illegal purposes. Cash, credit cards and current banking systems widely surpass Bitcoin in terms of their use to finance crime. Bitcoin can bring significant innovation in payment systems and the benefits of such innovation are often considered to be far beyond their potential drawbacks.
