Bitcoin Tutorial 1 : What is a Bitcoin?

Bitcoin is a form of digital currency, created and held electronically. It is peer to peer cash system that no one controls. Bitcoins aren’t printed, like dollars or Euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems with specially designed hardware. They are mined, using computing power in a distributed network

A software developer called santoshi nakamoto proposed bit coin. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees. This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. But limitation is that there is bit-coin protocol – say that only 21 million bit-coins can ever be created by miners.

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  • De-centralized – 

    The bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together. That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown – or simply decide to take people’s bitcoins away from them, as the Central European.

  • Easy to set up – 

    Conventional banks make you jump through hoops simply to open a bank account. However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable.

  • Transaction fee are miniscule and they are fast – 

    Your bank may charge you a £10 fee for international transfers. Bitcoin doesn’t. You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.

  • Non Repudiable – 

    When your bitcoins are sent, there’s no getting them back, unless the recipient returns them to you. They’re gone forever.

Bitcoin Price
Like all assets that have a finite supply, the value of a bitcoin is derived by the number of people that want to buy them vs the number of people that want to sell them.  If more people want to buy bitcoins than are currently for sale then the price goes up.

It is like stock market share where share are fixed and people compete for share such that if more people want than value of share goes high similarly if more people want to sell bitcoins than currently want to buy them then the price goes down. So its price is decided by number of bitcoin in circulation.

One can sell or purchase bitcoin in exchange of Indian rupee or dollar or euro or yen etc. current price of one bitcoin is 432 dollar.

Famous Silk Road Case
If there is positive side then there is negative side of every technology. Even computer and mobile devices have some disadvantages. Similarly bit-coins have some curse, one example is of Silk Road case which is an underground website of illegal drugs that have collection of 9.5 billion revenue bitcoin, it exchange drugs with bitcoins and thus government have no idea and it is totally illegal.

Ransomware cyber attacks 
At its heart, Ransomware mimics the age old crime of kidnapping: someone takes something you value, and in order to try to get it back, you have to pay up.And guess what, you have to pay in bitcoins so better earn some bitcoins. However if you are a Linux user, you can watch this show like a puppet who has nothing to do with.

Subscribe us for few more tutorials to follow on how bitcoin transactions takes place, what is block chain and how to mine bitcoin.

One thought on “Bitcoin Tutorial 1 : What is a Bitcoin?

  1. Bitcoin has shown amazing increases over the last years and there will be some that will claim that the bubble is soon to burst and Bitcoin plummet. Some of us continue believe in the concept of a user owned system outside of the reach of the banks. We will not believe that Bitcoin is past it’s best. We will be sticking with Bitcoin and are quite confident that it will keep rising more steeply than previously.

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