Bitcoin is officially back in the news this year after experiencing an increase in institutional liquidity that has allowed the popular cryptocurrency to experience its second astounding surge. The result of this increase in interest has led to critics finding it impossible to dismiss the digital currency as prices skyrocket. Many believed that the 12-year old asset had reached its limit and could go no further three years ago. However, Bitcoin’s latest surge has proven this hypothesis to be incorrect and has given credibility to the thesis, of bullish advocates, that Bitcoin is one of the most revolutionary technological developments of its time. It has been described as a synthesis of many years of cryptographic research and technology, with mistakes corrected from many precursors and false starts over the years. Bitcoin is one of the most perfect versions of digital currency in the world today and here are some facts to back that statement up.
Bitcoin is Cryptographic Currency
While many people are afraid of what they do not understand and are quick to shun it without a second thought, others have spread their notions about Bitcoin. Contrary to common misconceptions, Bitcoin transactions are the opposite of secret and are quite public. The system, and transparency, is made possible with the use of public-key cryptography, which is a computer science branch that uses math to encode data . Bitcoin owners will receive a public key (which is used to receive bitcoin to public addresses) and a private key that allows users to claim the bitcoin they have purchased or received. This means that bitcoin wallets do not store coins at all but rather private keys and grants owners access to them. In order to receive funds, users will share their public addresses to receive bitcoins and the private key to approve transactions that transfer coins to other users.
Bitcoin Transactions Are Irreversible
The digital ledger, or Bitcoin blockchain, which is where records for all transactions are stored, is immutable. This means that it cannot be altered or adjusted by any central party and the network cannot be cheated to allow people to spend coins that they do not rightfully own. A global network of miners is responsible for processing bitcoin transactions and entering them into the ledger. Miners are individuals or collectives, who are described as the workforce of the system, that run the machines to mine and maintain the blockchain. Miners are often rewarded with bitcoin in the form of a block reward, which is a payout that gets sent to the miner who is responsible for finding the next block for the chain’s sequence and makes a record of the most recent pending transactions in it. While mining might sound like an easy way to earn bitcoin, it requires a lot of energy as the competition is extremely fierce. The competition and energy that goes into mining help to secure the network by incentivizing miners to process transactions quickly and not to alter the ledger in any way. Failure to comply with the rules puts a miner’s payday at risk. Altering the network would require a miner to work 50% harder than all other miners in the network and could cost them thousands in operational expenses. It is due to these strict rules and unfavorable conditions that bitcoin transactions have never been altered in its 12 years of operation.
Bitcoins Cannot Be Confiscated
Bitcoin owners and traders would not take kindly to having their coins, that were either purchased or earned in trade with Bitcoin Compass , confiscated or stolen. While this is highly unlikely, it is not an impossibility especially if users do not take the necessary precautions. The only guaranteed way to get the most out of this functionality is to ensure that the private key remains a secret. As a means of adding extra security, many users have created multi-signature wallets that are designed to distribute the access to coins across different devices. Some wallets services could feature extra safety precautions such as dummy passwords that will enter a blank account in the case of extortion.
Bitcoin is Inclusive
Since bitcoin can be sent across the world as freely as a text message, Bitcoin services are inclusive. Bitcoin’s creator, Satoshi Nakomoto, specifically designed the system to not require permissions. This means that anyone, from anywhere, can use Bitcoin to maintain custody of value and transfer it. Nakamoto also designed the system to require no censorship, which means that there is no way to block users from joining the network and transferring their owned value. Nobody in the world has the ability to freeze coins or prevent users from processing transactions with Bitcoin. As a result of the way bitcoin transactions are processed , there are no central or third parties who have control over payments and allows users to transfer coins directly from their balance to their recipients.
