The Basics of Bitcoin as a Technology

The bitcoin has established itself as the latest innovation in its field. After some analyses, people have established it as a kind of cryptocurrency, or more specifically a digital currency. Before going any further, it’s important that you know the difference between such a digital currency and a virtual one. Namely, the real assets, possessions we have in the real world are expressed on the Web through digital currencies. On the other hand, virtual ones don’t actually represent any real asset. These are mostly used in specific contexts, such as video games.

Why Do We Need Bitcoins?

Bitcoins offer certain advantages to their users which cannot be found elsewhere. First of all, the traditional financial transactions which we normally use tend to include three parties, the sender, the receiver and the middle man – usually the banks. However, the fees we pay to the banks in order to establish order, maintain trust and keep transactions safe tend to increase over time. However, bitcoins are a completely peer-to-peer service, with direct contact between the sender and receiver.

Furthermore, bitcoins ensure anonymity. This is so because of their specific process of transfer. To start with, it’s important that you know that the bitcoin is normally defined as “a chain of digital signatures.” Understandably, these signatures are left by each owner of the bitcoin. They are kept in e-wallets with unique addresses, which is why the whole transaction occurs by a simple transfer from one e-wallet to the other. That way, each respective bitcoin gets a signature from its new owner, right after the signature from the last one. This, in turn, ensures anonymity, as the e-wallets’ addresses are the only thing necessary to complete such transactions.

Practical Application

Many people find use of this digital currency in their everyday life. After all, just like anything else, this currency is a novelty in a way, and everyone wants a piece of it.

Some people use the currency as a financial investment. Namely, as there is no centralized authority to handle things, bitcoins can be send and received infinitely, without tracking anything except the addresses, as mentioned previously. Therefore, the supply and demand determine its value, and most people buy it as an investment, hoping to sell it when its value is rising.

Moreover, there are others which simply use it for financial transactions and shopping sprees online. However, there is some malpractice here, as drug trafficking and other crimes can go unpunished and disappear without a trace.

A more legal, yet still risky application of bitcoins is their use for bitcoin betting sites. This has quickly become a widespread technique, and has caused the onset of sites like BitcoinGG.com, all dedicated to bringing bitcoining closer to your understanding.

Yet again, there are still not enough users in the world to turn bitcoins into a customary currency. Even though there are great benefits, people are still skeptical, while those who have decided to give it a shot, can’t actually apply it everywhere, considering that they still haven’t reached many spheres of everyday life.