Bitcoin essentially is a type of cryptocurrency that operates on the principle of the blockchain network. Blockchain is an innovative digital technology that has changed the conventional banking system. It is essentially a type of database known as a distributed ledger that is a decentralized P2P network. So if you want to invest in Bitcoin then you must choose a legal platform, and you can visit bitlq.org and start your bitcoin investment plan today.
Whenever a user records a transaction on the database it is time-stamped and recorded on a data block, which further in the ledger is linked to the previous one by a cryptographic algorithm called a hash and the linked blocks form a chain, which is where the name Blockchain comes from. How this works is that a user keeps a copy of the decentralized data block on their own personal computer and in some cases even on their smartphone, this data is replicated and synced across all the copies of the database in real-time.
The entire data of the ledger is both shared and encrypted which makes it secured because the attacker would have to hack each node of the network at the same time and bypass the encryption all at the same instant. Even if they succeeded, users are able to see the data being tampered with. This high level of security is one of the main points which attracts investors around the globe.
The basic principle on which Bitcoin is based is a game-changing technology ie blockchain. For the first time in the world, we can have access to an unadministered and decentralized distribution of a database which is not controlled by any central authority. You cannot make a transaction with fiat currency without using your banking server, and you cannot keep your data private. In the case of bitcoin, you can make transactions with anonymous identity, and you can make such transactions without using any third party apps or banks.
In the case of any basic database, it is present on one or two computers with possibly three or four backups, whereas in the case of blockchain, especially Bitcoin, the database is stored in thousands of locations and these locations are all undisclosed. Even if somebody somehow finds these locations, it’s impossible to attack all those locations at once and you can keep your coins safe in your wallet.
Conventionally, two separate companies doing business with each other would each have to maintain a ledger where they would keep track of their own and their partner company’s debts, liabilities, agreements, contracts, etc. But now, with this technology, companies can maintain their accountability, accuracy and predictability, unlike anything they have ever been exposed to before.
- Self-executing contracts can now be agreed upon by the two parties, where the blockchain community makes the contract self-executing, hence redesigning the way large companies did business with each other.
- Potentially this technology could help eradicate the need for the legal division, accountancy division and brokers in the companies and help the company to save a lot of expenses that would go into sustaining these divisions.
- With cryptocurrency, all the accounting would be done much more accurately and would take considerably less amount of time. People can make their international transactions with bitcoin faster through P2P network.
- Legal teams of the company would potentially be replaced by smart contracts and lawyers would then be specializing in smart contracts, which are much easier to devise and take considerably less amount of time.
- The technology on which Bitcoin is based can help you to make transactions with anonymous identity. So, people can keep their data confidential and private.
Bitcoin can change the way we perceive currency as a medium for transactions, but it is not without its flaws. With the current overall graph of the cryptocurrency market going downwards with each passing day, a lot of people are starting to lose faith in its longevity and future prospects. Apart from that, you must know the legal issue associated with bitcoin and other crypto currencies. There are some countries like China where ICO or Initial Coin Offering is banned. Most of the crypto exchanges and platforms are banned in China.
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