Bitcoin is a type of Cryptocurrency or digital currency which functions freely without any control of banks or governments. It depends on peer-to-peer technology and cryptography which has a decentralized system. This can be transferred from one user to another and each transaction is shared from node to node. All the bitcoin transactions are recorded by a common ledger, i.e, blockchain, and the copies of every transaction are kept on the server all over the world.
A person or a group of people named Satoshi Nakamoto invented the digital currency in the year of 2008. The implementation process started in 2009 and started using after it was executed as an open-sourced system. Bitcoins are generated as a reward for mining and they can be traded for other products and services including currencies. In other words, bitcoin was made as a way for individuals to send cash over the web and can be called an alternative payment system.
There will be a physical wallet for all the centralized currencies we use, likewise, bitcoins also has a digital wallet that can be accessed anywhere. There are so many cryptocurrency exchanges online and people can do the transactions, nowadays, even small businesses also accept bitcoin.
While talking about the security system of bitcoin, the cryptography is based on an SHA-256 algorithm developed by U.S National Security Agency. Hacking this system is impossible and thus the digital money is safe in your wallet. A practical issue in using bitcoin is that the currency operates without any central agencies. So if the user commits any mistakes with an exchange on their wallet has no plan of action. If you send the bitcoins to the wrong wallet, it is almost impossible to rectify, and need to deal with the passwords really carefully.
The bitcoin network is maintained by the process called mining and also new coins are brought in. All dealings are intimately published on the network and miners rush large collections of deals together into blocks by completing a cryptographic computation that’s extremely hard to induce but veritably easy to validate. The first miner to break the coming block broadcasts it to the network and if proven correct is added to the blockchain. That miner is also awarded a quantum of recently created bitcoin. The critics point out that cryptocurrency has also been linked to certain Cybercrimes which is a perfect way for the black market dealings.