Binance released its highly anticipated proof of reserves (PoR) on Friday, providing blockchain-based evidence for the Bitcoin on its books. However, many in the crypto community question Binance’s approach, and aren’t fully convinced that they have the transparency they’re looking for. The Move to Proof of Reserves As Binance explained in its announcement, the exchange’s transparency system will add multiple tokens and networks within the next two weeks. For now, it solely validates its Bitcoin holdings. The company’s initial audit…
Bitcoin is a groundbreaking invention that has spurred a new financial revolution with long-term consequences globally.
Bitcoin could very well be the most important invention since the creation of the internet. Economy experts see it as the dawning of a new age, one in which electronic cash and virtual transactions will reshape our understanding of currencies, investments, and financial intelligence.
Bitcoin in a nutshell:
- The origin story of Bitcoin is shrouded in mystery. The first official reference to it was made on October 31st, 2008, through a whitepaper that explained some of its features and benefits. It was invented by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its source code was released as open-source software.
- Bitcoin gives financial power back to the people.
- Bitcoin transactions are more secure than real money transfers, and no Governmental institution or bank can control Bitcoin.
Despite their graphic representation as golden coins with a large “B” on top, physical Bitcoins do not actually exist. They are not coins or printed bills that you can store in your pockets. The entire amount of Bitcoin units is available only in virtual form.
Blockchain is an unalterable sequence of transactions that rely on each other to validate their authenticity. These transactions can hold any data, but most of them feature economic values. They create a long string (or chain) of records (or blocks) that can grow endlessly without accepting data modifications.
When it comes to Bitcoin, the blockchain technology enables the transfer of virtual money between peers in a perfectly secure transaction and as part of a fully decentralized ledger that does not require the guidance and control of external financial institutions.
Bitcoin works as part of a relatively straightforward process. People who possess Bitcoins can transfer them to a peer-to-peer network. Each transaction becomes an encrypted record in the giant, ever-increasing blockchain (ledger) that includes all the Bitcoin transfers ever made.
How to own Bitcoin
Having Bitcoins is a bit different from having a classic bank account where you store regular cash units. The ownership that you have over cryptocurrency is a bit illusory. You don’t have actual Bitcoins but units stored in your Bitcoin Wallet as Unspent Transaction Outputs (UTXO) on the blockchain.
Your account is established and accessible through two digital keys:
Private Key – think of it as the secret PIN that you never reveal to anyone, as you will lose access to your bitcoin.
Public Keys – think of it as the number of your traditional bank account that you can give others to send you payments or invoices.
The Benefits of using Bitcoin
Bitcoin is a newcomer in the financial world. Its network grows constantly and attracts new investments made with real money, which only increases its value. Some of the benefits of using this cryptocurrency include:
- Decentralization – People can opt to make transactions that do not require governmental or banking supervision.
- Ease of Use – The real cash value of Bitcoin that you can use, send, or carry over an international border is limitless.
- Security and Low Transaction Fees – While banks charge huge commission fees for most transactions that they intermediate, Bitcoin transactions only require a tiny fraction of its value.
The Risks of using Bitcoin
Although Bitcoin is ushering in a new age of financial understanding at a global scale, it’s still in its early development stages, which means that it still poses a few minor risks, such as:
Bitcoin is the first and rightly so, most popular cryptocurrency on the market. At first, it may seem a bit difficult to grasp its power and potential, but the more you discover about it, the easier it gets.
You can get a deeper insight into Bitcoin by becoming part of the network and exploring the numerous opportunities offered by a decentralized, free, and people-backed financial system.