What is Bitcoin and how does Bitcoin wor...

What is Bitcoin and how does Bitcoin work

What is Bitcoin and how does Bitcoin work

Jul 17, 2022 te Files

Bitcoin is a virtual currency that can be compared to other currencies such as: USD dollar, Euro, and others. Of course, there are several basic differences between it and traditional currencies. The most important of these differences is that this currency is a completely electronic currency that is used over the Internet only without a physical existence of it. It also differs from other currencies by not having a regulatory body behind it. But you can use it as any other currency to buy online or convert it to other physical currencies.

Bitcoin is based mainly on the coding principles. It is considered the first and most popular and widespread among other virtual currencies. It is not the only cryptocurrency on the Internet. There are many of these virtual or cryptocurrencies. All of these currencies are built on the principle of Bitcoin. Since it is an open source currency, it is possible to clone it over and over again and make some modifications to it and launch it again under a new name.


The beginning of Bitcoin:

It first appeared in 2008. When someone named Satoshi Nakamoto came up with the idea of Bitcoin in 2008. He described it as an electronic monetary system that relies on the peer-to-peer principle in financial transactions. It is a technical term that means direct interaction between one user and another without an intermediary between them.


Are cryptocurrencies secret?

Some people ask what it means for Bitcoin to be a secret currency. In order to answer this question, it is necessary to know some important things about the Bitcoin network, especially in transfers. As all you need to send cryptocurrency from your wallet to someone's wallet is only their wallet address.

But in the fact that every transfer is recorded in the record of transfers of that currency, which is called the Block Chain. Even though you don't know who owns any address, you can know the total number of bitcoins that have been transferred through that wallet address. In addition to the addresses to which the bitcoins were sent.

So if someone explicitly declares that they own certain Bitcoin addresses, you will be able to find out which addresses they have sent Bitcoins to them. And what addresses do send bitcoins to.

Disclosure of your bitcoin address is a constant occurrence. As you will need to give it to someone, in case you need them to send bitcoins to your wallet. It is therefore advisable to use different addresses for different transfers to maintain a certain level of anonymity or confidentiality. However, there are many who do not.


Can cryptocurrency transfers be tracked?

Technically, it is still possible to trace the source of some suspicious operations on the Bitcoin network. Where it is enough to track transfers until they reach the addresses of the Bitcoin wallets whose owners are known. And then it is enough to carry out reverse investigations until reaching the owner of the suspicious account.

Certainly, the amount of data related to all the conversions is very large. However, the power of computers is constantly increasing and the traceability of these processes may be feasible. It can even be assured that tracking bitcoin theft is much easier than tracking theft of money in paper form.

Currently, there are not many options for those who own bitcoins to spend these amounts through. This prompts many of them to convert Bitcoins into traditional currencies such as Dollar, Euro and other traditional currencies.

These transfers are carried out through platforms for exchanging or transferring cryptocurrency, and there are many of these platforms spread on the Internet.


What is encryption?

The encryption term is the technique of saving important data and information and the ability to put it in a form that is difficult to read, and therefore this data is completely confidential. The encryption process uses mathematical symbols and complex algorithms to convert data and information into difficult form to understand or read.

Of course, the user can read this information in its encrypted form. But this is only done if this user has the key that can translate the encrypted language and show the information in its normal form before encryption.

In the progress and development age in computer science and the development of the structure of computers and the possibility of building giant devices with powerful hardware, coding becomes very complex. This is due to the use of more complex algorithms than before, and thus the possibility of decryption becomes more difficult and difficult.

This encryption technique is also used to encrypt bitcoin block data. While keeping it in the user's bitcoin wallet. Or while transferring it from one wallet to another.

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