Legal tender is a piece of paper that has been given value and authority to trade by the government. It means that the actual printed form is worth nothing; it is only worth the government’s weight. This form of business value acceptance proves that we trust the government. All our online transactions go through a bank or credit card company that takes a cut to verify our information and store receipts of the ledger.
When you purchase at a shop, the shop checks with the bank to confirm if you have the money that you intend to spend. Once the bank confirms that you do, they will give the shop the go-ahead to trade with you and then take their share of the transaction for being the middleman.
When a bank takes money and keeps a ledger to tell how much each person has saved and spent, we trust the bank’s system not to make a mistake. When banks have made mistakes or governments have frozen accounts, it has affected owners of funds due to the absolute control that these entities have.
In 2008 an anonymous programmer, Satoshi Nakamoto, invented Bitcoin through a suggestion made on a white paper journal on a crypto blog. There have been several people who have claimed to be associated with the name but without concrete proof. Satoshi Nakamoto has said that creating the cryptocurrency was because there was a need for an electronic payment system based on cryptographic proof instead of trust.
Bitcoin is a decentralized digital currency that can buy, sell and exchange directly without an intermediary like a bank or government. Bitcoin is the first and most popular cryptocurrency among the hundreds of digital currencies launched since 2009, collectively called altcoins.
There is a collection of computers referred to as miners that all run bitcoin’s code and store its blockchain. A blockchain can be explained as a database of information available and accessible to everyone. The goal of a blockchain is to allow digital information to be recorded and distributed to all parties. When one decides to alter the blockchain or lie about a transaction, they will have to hack into the thousands of computers that are all keeping copies of the transactions. Bitcoin is a public and transparent ledger that anyone can access on a global scale. This accountability means that no one person controls the system or keeps records, and all parties would quickly identify any transaction under false parties. The only hidden thing is the identity of the persons behind the transactions. Once the transaction happens, it is copied to everyone in the ecosystem, and it cannot be changed or deleted.
To explain how to acquire bitcoins in layman’s terms, a group of words and numbers that your computer’s CPU or GPU needs to guess. Once you manage to guess those words successfully, you have thoroughly mined a Bitcoin. Once a transaction goes through, someone in the ledger gets a free bitcoin at random.
There are no actual coins. Instead, there are specific rows of transactions that a person owns. The money is entirely digital. Bitcoin then becomes a form of money any one entity or person cannot control. Bitcoin created to be a digital currency solely means that no one can freeze your accounts or ever hold your transactions for whatever reason. This security and transparency are why Bitcoin is referred to as a peer-to-peer digital cash system. That means everyone is in control, and no one is a regulator. As a result, it’s cheaper to use than actual money transfer systems that rely on middlemen charges.
With this been analyzed, I hope you get the concept of Bitcoins now. On you can on how to buy bitcoins here. If you have any questions you can drop it in the comments section and I will be glad to answer.
Kwabena Okyire Appianing
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