Imagine the bank’s safe-deposit box. Enter and you have the key only from your box, to which only you know the number. You can open it and unload it. But the value boxes also have a slot, like mailboxes, where you can enter the content into anyone else’s box. But you do not have the keys and you do not know who the owner is unless he tells you.
Each user can keep a copy of the entire vault with all the value boxes. Thus, all users can be present in the vault with value boxes, alone and simultaneously at the same time.
Everything is so certain that nobody has ever managed to forge a key, break the box, or stick his hand through the slot. Instead, be careful, if your key is stolen, or you entrust it to someone who does not need it, the robbery becomes trivially easy. Even anonymity is not fully guaranteed – disclosure of identity for a single transaction can help identify all operations made in the same box. Rigorously meaningful is the bitcoin description as a pseudonym coin. Codex Review 2018 explains it well in the following article.
Where’s does the bitcoin come from?
Actual coins are “mined”, which anyone can theoretically do. Each bitcoin is earned by solving a cryptographic problem that requires large processing resources. The time and resources required to solve are perfectly predictable, but they are getting longer with each bitcoin already produced. Check this out.
It is an industrial business like any other – it costs equipment, wages. Sales are virtually guaranteed, with the risk being the price at which they will happen. Like everything else in the 21st century, most bitcoins are now produced in China, in three to four very large farms. Up to now, nearly 16 million bitcoins have been produced and the maximum is 21 million and will be reached in over 25 years.
Why this method
Bitcoin needed a “democratic” distribution method, because no one would have agreed to give the money to a single owner and stretched over time as it spread. In addition, the cost of equipment also gives an objective cost target against which the market price oscillates. Freedom of production has also worked as a social marketing method – many have entered the market to earn money, then have specialized and contributed to development and popularization, practically causing a network effect.
Who uses bitcoin
Despite currency claims, Bitcoin cannot be used because of the huge volatility. Even sites that claim to “accept” bitcoin payments are actually priced in dollars, euros, or other real currency, and accept Bitcoin only as a method of transferring funds at the current quote. Bitcoin transfer is by far the cheapest of all – down to 0.0001 bitcoin, that is below 5 cents per transaction. Money collects all of the “mining”, because also confirming transactions is a service that requires computing resources.
Until recently, bitcoin’s greatest utility was in the area of illegal transactions (drugs, weapons, etc.) on sites like Silk Road.
Look at this related site: http://money.cnn.com/infographic/technology/what-is-bitcoin/
Now, they are losing ground to legitimate uses (cheap or inconsistent) or even legitimate: China has the simplest way to convert the yuan into dollars. In Russia, it is the easiest way for citizens (the state wants to declare it illegally) to circumvent international financial sanctions. In India, it is among the few ways to escape totalitarian capital control. One third of the world’s countries, with over three quarters of the population, is outside the financial system we are accustomed to.
Of the medium and long-term holders, most treat it as a speculative investment, while a small but still vanguard minority still awaits the collapse of “all coins”.
What will happen to bitcoin?
The coin showed its exceptional technological advantages but also its limits. The main limit was shown from the beginning: extreme volatility. By the way, the acceptance rate has remained low – the big names that accept bitcoin do it rather as a marketing maneuver and, as I said above, only as a price system not as a pricing benchmark.