Bitcoin is considered to be the world’s peer-to-peer cryptocurrency or digital currency. The technology that got released in the year 2009, Bitcoin is now known as the most significant application of blockchain today. The major idea behind Bitcoin came when peer-to-peer cloud computing and networking were redefining the technology spaces of data storage, networking, and management. However, the maintenance and security of these networks were majorly handled by the large corporations who were looking to make a profit. On the abstract level, the documentation of Bitcoin was a proposal to move the maintenance and security work to anonymous, external crowd contributors, bringing to get the democratic and decentralized shift in the industries.
Why Bitcoin was invented and how does it work?
Primarily, there are three types of people who belong in the world: the consumer, producer, and middleman. If you are considering selling a book on Amazon, you have to pay the amount of 40-50%. The thing is the same almost in every industry. The middleman is the one who always takes the big part out of the producer’s money.
To know about the Bitcoin, it is essential to know why it was created. It was developed to remove the middleman which is the banks. If you want to transfer the amount of $6000 from your country to friends in the United Kingdom, the money should go through the bank in your country. The processing fee is taken by the bank. Once the money reaches the bank in the United Kingdom, the bank of your friend charges a fee too.
The fee is not a problem, but the data which is stored by them. Banks store a lot of private data of their customers. Most of the banks have been hacked from the past 10 years which can be dangerous for the people who use it. This is why it is vital to understand as suggested by the experts de.the-bitcoin-evolution.com that how Bitcoin works.
Unlike Bitcoin, banks block/freeze people account whenever they like. They have a lot of control over the people who use banks and they have also abused their power. The financial crisis even took place because of them in the year 2008. Most of the people believe that crisis was also one of the major reasons to create Bitcoin.
The solution here was to develop a system with no single authority such as a bank. Only a single authority should never have the power to control things. The governments along with the banks controlled the currencies, so a new currency had to come.
Bitcoin is known as the solution with no single authority which means no PayPal, banks or the government to give you the instructions to freeze the account. No doubt it’s great.
Advantages of Bitcoin
- Low fees
- International payments are faster than the banks
- Blockchain, which is impossible to hack
- You can remain anonymous
- You don’t need to trust anyone
- Any person can use it, no verification required
The Bitcoin invention is only the beginning. Some of the people are using it and other cryptocurrencies instead of banks, but the banks aren’t completely replaced yet.