When this word came in any party, whole discussion having no conclusion wobbles onto the topic of crypto currency. No one having the deep knowledge but everyone is expert. You will get the suggestions also, like “Boss, buy it and you will remember me”, “New era is of crypto currency only”, “Volumes traded in Bitcoins is more than nifty everyday”, “My friend Bought one Bitcoin at 2.5 lac rs and sold at 8 lac rs just in few monts”, ”Government is going to declare it legal and after that the price will shoot”!! and on and on and on..
When we ask experts”So called”, what is Bitcoin, we will get the answer- its crypto currency. Okey!!! But what is crypto currency? Answer is, it is de-centralized system, you can have P2P (Peer to Peer) transactions to give or take that currency say Bitcoin and every Bitcoins having mathematical formula, you just need to crack it and Bitcoin is yours-it is called mining.
I know, you are not understanding what is going on, and still in confusion that what is crypto currency and what is Bitcoin? Lets have some basic ideas in different way.
As Bitcoin is (crypto) currency, means it is currency but crypto. What is crypto? Remember Dan Brown and its books based on cryptology. Crypto means code, and cryptology means study or art to solve the codes. So, Bitcoin is nothing but one currency, and every single piece of Bitcoin backing with one code; code in the form of mathematical formula. You solve one formula and mine the Bitcoin. As it is currency it is having some value compared with dollar. Right now forget about value of the Bitcoin, just focus on how and why it is traded.
There is definite volumes of Bitcoin and after mining the Bitcoin you will sell it to another person, its trading. Is it so simple, just solve one formula and a Bitcoin (15 Lac rs at the pick) is yours? The answer of my question is “nop”. To mine one Bitcoin we need to install super computers say 5-6 such computer all in series to solve one formula. When we connect all in series it generates tremendous amount of heat which requires outside cooling and so capital cost for set up to solve one Bitcoin formula is very high. However, after proper set up you can mine as much as you can.
Now, there is few platforms to trade that Bitcoin. you give me the money and I will transfer Bitcoin on your name. One interesting fact here!! Every Bitcoin is having the name of the owner, past history/transactions and mathematical formula. One more fact, Bitcoin is de-centralized currency. It is just block chain. So, no one having the power to stop the transaction or reverse the transaction. No one means no one, not US president not Reserve Bank chief not even Satoshi Nakamoto. Its extremely difficult to hack Bitcoin or the block chain as it is not connected to any server.
Hold on!!! Who is Satoshi Nakamoto? What is his relation with Bitcoin? What he is doing here in Bitcoin article? Stay tuned for another interesting article of Bitcoin.