Satoshi Nakamoto is a person who has become famous for creating the first cryptocurrency: Bitcoin. This currency was created in 2008 through the cryptocurrency mailing list. Nakamoto published an article in the same list in the scientific field and achieved great popularity with it. By January 2009, this person shared the open source version by linking several computers together, thus creating the basis of bitcoin operations. In this sense, the pros and cons of Bitcoin were developed along with the birth of structural systems of other emerging cryptocurrencies.
The main objective of such a project is that customers could make transactions among themselves and that these transactions would be backed up in a list. In this way, the security of transactions with the corresponding coins could be verified.
First Bitcoins Mined
In 2009, the first cryptocurrency mining was also carried out, resulting in the first bitcoins in January of the same year. This caused a great stir worldwide because, at the same time of this event, Satoshi Nakamoto disappeared without a trace.
Since that date, the creator of Bitcoin has been missing and no one has any idea of his whereabouts. Given this reason, there exists different theories about it. For example, many say that he is not a real person. Other people say that the creators are a group of programmers. In addition to that, it is also said that the creators must be European or North American, since the platform has no indication of being of Japanese origin (something that is rare due to the nature of the coined name of its creator).
Should the identity of Satoshi Nakamoto be discovered, it is possible that there will be a variation in the price of bitcoin of an unusual nature. This situation has the potential to generate large losses and the structural model of the cryptocurrency will have to change in some way.
What was Bitcoin Created for?
Although the identity of bitcoin’s creator remains a mystery, the purpose of its creation is by no means a secret. In a nutshell, the purpose of this cryptocurrency was the financial recovery of having control over it, offering people to participate in a non-centralized financial system.
Before commenting on the pros and cons of Bitcoin, it is necessary to know that it does not have total control over its design, since it is open source. However, anyone who wants to can participate because it has a publicly available design. This cryptocurrency has shown that large financial institutions can fail, since it managed to respond to the financial crisis by decentralizing transactions (i.e., without intermediaries).
Cryptocurrencies, more specifically in the case of Bitcoin, achieved the trust and security of users through the use of the blockchain system. This is like a high-level ledger that is based on the network in which absolutely all users can participate. In 2009, specifically on January 3, someone mined the “genesis block.” This was the name given to the first block of a cryptocurrency, and it was mined by its creator to act as the basis of the blockchain.
During the first months, miners put their computers to work solving highly complex mathematical problems to obtain new bitcoins. In addition to that, they benefit from rewards for processing and auditing encrypted information that conforms each transaction.
How Do Cryptocurrencies Work?
The functioning of cryptocurrencies depends solely and exclusively on the blockchain system. It is based on a decentralized network of computers where each one of them represents a node and they are distributed around the world. In these nodes, exact copies of all movements are recorded. In this way, the network is backed up at the time of saving any change.
The information is transmitted throughout the computer network to be cryptographically protected. In addition, it should not be forgotten that each block links the data of the previous block, whether it is date, transactional data, among others. Another important fact is that the design does not allow such data to be modified, having a high level of security, privacy and trust.
In conclusion, the blockchain system represents an open book in which all information or transactions between two users are recorded. Likewise, it is not only recorded in one block, but is replicated in the rest of them.
How is it Possible to Obtain bitcoins?
Anyone wishing to obtain bitcoins, if that person is inexperienced, it is best to be advised through specialized services. These services are offered by platforms with good reputation and large user base that simplify the procedure to follow to obtain bitcoins. These are called digital wallets. And, just like in real life, you get one and can back up money from a credit card in it. Additionally, you can make purchases of bitcoins or any other cryptocurrency through exchange platforms.
Like all online services, they also charge a fee for each transaction. Each wallet has certain functions and they are accepted on some websites. For example, the most used platforms to obtain bitcoins are usually Coinbase and Binance, although they are not the only ones of the same type that exist.
The design of digital wallets is of great importance due to the design of cryptocurrencies. These wallets actually store private keys and public keys. These keys verify the ownership and rights to the cryptocurrencies held at a specific address. The following is an explanation of what public and private keys are.
- Public key. Similar to a bank account, only that it is impossible through the granting of these digits to extract funds. It is through these keys that addresses are produced both to consult and to receive funds.
- Private key. It represents a pin or password, which should not be shared, since it validates the right to use cryptocurrencies.
Pros and Cons of Bitcoin – Examples
The pros and cons of Bitcoin include the following:
- International currency. It is a currency that allows users to travel outside the European Union without having to look for exchange houses to make the conversion. Bitcoin is an international currency that works worldwide, except in some countries.
- Security. This is the main attraction of this cryptocurrency, since it is impossible for it to be counterfeited.
- It has decentralization. It is not a currency controlled by any financial entity or state, which allows it to have independence.
- Fast transactions. These are carried out between individuals, almost immediately and at a considerably low commission cost.
- It always reflects its real value. This information is disclosed 24 hours a day to inform users of the value of the currency at any given moment.
- Investment risk. As with all cryptocurrencies, there is a risk of gaining or losing due to market volatility. This happens especially with Bitcoin, since it is the best known of them all.
- It is not accepted in most establishments. Some popular stores are still wary of cryptocurrencies, not just Bitcoin.
- It can be used for criminal actions. By giving anonymity to customers, it can be a double-edged sword for criminals to make illegal use of it.
- Digital wallet. This wallet cannot be lost, as the user is obliged to pay a fine of €50 and €200 as a minimum standard.
- Need for stable internet.