What is Bitcoin and the types of Bitcoin
Bitcoin was created in 2009 after the crash of the housing market, and identity of the creator of this technology is still unknown. It is a collection of computers that run the codes of Bitcoin and store its block-chain, which can be defined as a collection of different blocks. Each block has a collection of transactions, and all the computers that run the block-chain have similar lists of transactions and blocks. This means that the system see when the blocks have new transactions, and nobody can fool the system.
It is a type of cryptocurrency whose tokens of balance are kept using private and public keys. These are long string of numbers and letters put together by a mathematical encryption that was used to create them. The public key which can be termed as the bank account number is the address posted to the public, and others can use it to send Bitcoins. Private key is like a pin that is guarded secretly, and can only be used in authorization of Bitcoin transmissions. A wallet is different from the keys which is a device created in a digital way, and is used to facilitate trading of Bitcoin, and gives users allowance of tracking the ownership of Bitcoins. Bitcoin was the first to facilitate instant payments using the peer to peer technology.
Mining of Bitcoin is the release of Bitcoins in the circulation, and this requires solving computationally puzzles to come up with a new block. It is added to the block-chain, and contribution of mining to the chain is that it adds and verifies transactions that take place across the network. After adding blocks to the chain, miners receive a reward of a few Bitcoins which is half every two hundred and ten thousand blocks. Investment in Bitcoin is not supported by any government or Central bank, but can be exchanged for traditional currencies, its rate of exchange against the dollar attracts many customers and investors. Growth of Bitcoin is encouraged by the fact that they act as alternative to national fiat money and commodities like gold.
The liquidity of Bitcoin is high compared to other currencies since converting it to cash is easy because of its popularity. There are many stores that accept Bitcoin, and that makes it easy to buy and sell using Bitcoin through majority of investors who accept this currency, and this a way of spending instead of converting Bitcoin to cash. When compared to other currencies, it’s undeniable to say that Bitcoin is the largest cryptocurrency dominating the market by over forty percent, and it was the first crpto. There are pros that relate to Bitcoin, and the first is how frequent the currency fluctuates, and even if the investors like these, traders who lose money would not appreciate Bitcoin. Replacement of Bitcoin by a better cypto currency is possible since other currencies like Altcoin are newer and advanced. Another disadvantage is that people still use Bitcoin for crime and fraudulent activities.
There are cases each day of people who use Bitcoins illegally, and there is high possibility that some go free which spoils the reputation of Bitcoin. Litecoin is considered part of Bitcoin because its way of functioning was part of Bitcoin. Splitting occurred after update for Litecoin was offered, they are similar but function in different ways. The crypto currency was created to bring improvement on what Bitcoin had created. Litecoin will be the first to make use of the lighting network that solves issues such as scalability. By making use of this network, the platform will find it easy to transact a lot in a matter of seconds.
Transactions using Litecoin takes seconds that is less time compared to Bitcoin that takes more than ten minutes. Performing transactions with Bitcoin is costly, and that makes using their platform pointless when transacting a small amount of money. Litecoin is much cheaper, and that makes making small payments with this easier and applicable. There is only a slight improvement from the features that Bitcoin has, and the only advantage would be cheap and fast payments. That means, if Bitcoin can take a step and achieve this, then there would be no need of it since, the features and advantages would be similar.