What is Bitcoin? How to get Bitcoin? - The name bitcoin may not sound familiar at this time, many people are enthusiastically trying to invest in bitcoin for profit or for trading purposes such as buying goods and others. Then what exactly is bitcoin? what are the benefits of using bitcoin? to the point that many people are enthusiastic about bitcoin. This article will briefly discuss cryptocurrency number one.

What is Bitcoin? How Does Bitcoin Work?

Bitcoin is a digital currency (cryptocurrency) that is used to transact online on the internet created by an anonymous programmer with the pseudonym Satoshi Nakamoto in 2009. The main function of bitcoin is used to transact on the internet without using a third party or financial institution (bank) . Bitcoin is also defined as a peer-to-peer electronic payment system.

Bitcoin uses a peer-to-peer system which means the bitcoin system runs without a central server. Bitcoin storage servers are decentralized and distributed, and are shared with various servers run by each user connected to a peer-to-peer network. In addition, Bitcoin uses the Blockchain database to record transactions directly and transparently and spread to millions of servers. So it is impossible for someone to fake transactions on the blockchain, because the blockchain is open to the public so everyone can monitor.

It is different from the common currency that is deposited in a bank account, which must use a real identity. Basically, Bitcoin is stored on a personal computer with the Wallet file format, or stored in a wallet provided by third parties such as blockchain.com, coinbase, and others.

Is Bitcoin Safe?

You might think that the bitcoin system is not secure because it is open source and think that a hacker who is a genius can break into the bitcoin system and issue a number of bitcoin for his own benefit. In reality the Bitcoin system has been reviewed and reviewed by various groups both community or institution, and they call it a flawless system. In the bitcoin system, every past transaction data is stored in all peers throughout the network, and all must be sequential. Each new transaction will be declared valid on the network if verified by a number of new peers.

The bitcoin system is very safe until now, what is not safe is users and cryptocurrency exchange. Just like an account password, hackers can easily steal some money from you if the computer is infected with a virus or you get phishing.

How to get Bitcoin?

There are so many ways to get bitcoin, one of which is to sell goods or services and ask people who buy to pay you using bitcoin. Another most popular way is mining / bitcoin mining. But to be able to mine bitcoin, you must have sophisticated and expensive tools. Besides selling goods and mining, another way to get bitcoin is by buying on bitcoin exchanges such as coinbase, binance, bitmex and others.

What's the Difference between Bitcoin and Traditional Currency (Fiat)?

There are some basic things that distinguish crypto currencies from traditional or fiat currencies that can even be traded digitally. Here it is the difference.

1. Decentralization
The most important characteristic is that it is decentralized. There is no single institution that controls the Bitcoin network.

2. Limited Supply
Unlike fiat currencies which can continue to be issued by the country's central bank, Bitcoin has a total supply of 21 million which is fully controlled by the underlying algorithm.

3. Pseudonymity
The Bitcoin system which has no central validator makes us semi-anonymous users. If we want to send or transfer, the system only checks if we have Bitcoin to send and does not check our identity. So that transactions that occur in the system are pseudonymous.

4. Eternity
Bitcoin transactions and other crypto assets cannot be canceled, unlike electronic fiat transactions.

5. Can be shared
The smallest unit of Bitcoin is called satoshi. This is one hundredth of a million BTC (0.00000001) - at the price of Bitcoin today, around one hundredth of a cent. This can allow micro transactions that cannot be done with traditional electronic money.

Bitcoin vs Blockchain

Many ordinary people are mistaken in understanding Bitcoin and Blockchain. What is Blockchain? Are Bitcoin and Blockchain the same thing? In short, Blockchain is the technology behind this first cryptocurrency. The BTC system is an implementation of technology that we call Blockchain technology.

Blockchain is a technology in the form of a digital book (ledger) that records all the history of transactions that occur in a Bitcoin network. The transaction record is encrypted in a cryptography consisting of a row of 16 numbers and letters and then added by itself to the transaction history.

Blockchain is used as a system for recording crypto asset transactions. Technically, the Blockchain system uses a block as a list of records and history, the block contains data that is formed into a hash. Transaction records in the form of blockchain can be accessed by everyone in the same network, thus providing transparency for all who use Blockchain.

Bitcoin is built on a blockchain system, and it can be said is the first blockchain application that was built to make this first cryptocurrency often referred to as the first version of Blockchain or Blockchain 1.0.