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What is Bitcoin?

Next Generation Monetary System: Bitcoin
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What is Bitcoin?

Contrary to popular belief, Bitcoin is not a currency but a whole payment system. The Bitcoin system, abbreviated as P2P, is a system that aims to decentralize and make the monetary system transparent by using the “peer to peer” technology. Uncovered by a mysterious software developer, this system later became known as a currency.

It has blockchain technology behind it.

Since the software of this payment system, which has blockchain technology behind it, is open source, different systems can be created easily by adding on it. It has been created. Open source means that the code that makes up the software can be read or even copied and modified by anyone who wants and understands it. Blockchain technology was copied by various companies that wanted to create monetary systems and various currencies were created. These were called “altcoins”.

While most altcoins go as they come, some are powerful enough to rival Bitcoin. Thus, systems such as Ethereum and Ripple began to enter our lives in many ways. Ripple has become the most widely used cryptocurrency in banking today. Thanks to Ripple, the money sent from one end of the world to the other reaches its recipient without touching the bureaucracy and paper costs. Ethereum, on the other hand, has become a large system that contains “tokens” in many areas from gaming to the health sector.

What made Bitcoin so big?

The technology behind it removes a lot of things in the current order. Eliminating middlemen and the center means that the state or banks do not play a role in the money flow between two people. It should not be thought that they cannot control because they do not take a role. Not only government agencies or large security companies, but anyone who wants to can access these records. Of course, when we first look at it, it is difficult to understand which address belongs to whom, but this is the skeleton of the system. Bitcoin addresses can be made name-specific in the future.

It is a good situation that the center disappears and that auditability continues. In fact, if we do not want the state to get tired of controlling this system, auditing can be costless with some additional software. But there is more to it. The cost that has already been reduced to zero is the intermediary cost. The fact that the money sent from person A to person B was carried by “p2p” only as a numerical value completely destroyed the papers, signatures, and procedures unique to each bank. I am sending Bitcoin to China from here and neither I nor the recipient are accountable to anyone, nor is there a service fee. Because the accounts are registered on the blockchain and the service is provided to us by software.

Although the existence of a system that is not managed by anyone but can be audited by everyone gives a feeling of overconfidence, there is still the possibility of Bitcoin being a bubble. The uncertainty of the identity of its founder, Satoshi Nakamoto, makes the system somewhat insecure. We don’t know if it would be better if we knew who the name behind it was. Perhaps he chose not to be around at all for fear of being destroyed by the gainers of the old monetary system.

Aside from the uncertainty of Satoshi’s identity, there are also Bitcoins that have never moved. Since Bitcoin, which has a price of around 350,000 liras today, was not that valuable in its early years, sending 1000 Bitcoins from one wallet to another would not have been a news item. However, such a posting today is not news, it is shock news. If you understand this part, I want you to look at it from this perspective; There are too many Bitcoins that were bought in its early years and never moved. Considering the current state of Bitcoin production, which can produce a total of 21 million pieces, I think you would not want to be a small fish.

2 Million Bitcoins Left

About 19 million of Bitcoin, which started to be produced in 2009, has been produced until today. The remaining 2 million parts will be a production period that will last for many years. The fact that a large part of something that is almost completely produced in the market is already shared and its value increases as small investors enter, increases the small investor’s money by a maximum of 2-fold. A wallet that had not moved since 2010 was in the news as it moved in 2020 and distributed 1000 Bitcoins to various wallets. Bitcoin, which saw $10,000 in 2020, was only $0.008 in 2010. So, while 1000 Bitcoin was nothing for that day, even 1 of them is worth a fortune today. If millions of Bitcoins, which have not moved yet, are suddenly displaced, there may be major crises in the world economy,

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