Bitcoin: A Payment System of The 21st Century – Eastern Daily News

Bitcoins are a payment system of cryptocurrency and is the first digital currency in the world. It was invented by a group of programmers. The name of the group is Satoshi Nakamoto. This payment system was first presented in 2008 to a mailing list of cryptography. Later on, its open-source software was released in 2009. The bitcoin payment system uses peer-to-peer technology. Bitcoin doesn’t need any bank that manages transactions. Rather, Bitcoins are issued on the networks of the Internet.

As said above, bitcoins have open-source programming. This means anyone can use this software and make changes according to their needs. Its design is public and nobody can own this currency. Everybody can use them. Bitcoins have many characteristics. In fact, it is designed by means of cryptography.

The payment transaction is secured through encryption methods. The encrypted data is encoded into unknown characters and digits. It is extremely difficult, or impossible, for hackers to access data. The sender sends data in encrypted form. The receiver receives this data and decrypts it with the help of keys that the sender provides to him. In this way, a secure transaction is taken place.

Amazingly, the traders have accepted Bitcoins for products in 2015. This form of payment is an alternative to credit cards which demand high taxes. The traders have to pay less than 2 percent, or sometimes 0 percent, tax on Bitcoins. Bitcoins and Banks are rivals of each other. Bitcoins were criticized by the European Banking Authority. They claimed that the users were not secured by chargebacks.

Moreover, many people also use this currency for fraudulent purposes. Financial regulations have taken place to overcome this issue. The media is educating the people in this regard.

In addition, transactions are recorded with the help of a blockchain, a public ledger. Software is used to maintain blockchain with the help of a network of communicating nodes.

Wallets: When the transaction takes place, the network generates the important information regarding the transaction. This information should not be broken and must be protected from hackers. To do so, a Wallet is used to store all the important information. This wallet is not accessible to everyone on the internet. Wallets contain two keys. One is public and other is private. It is called a public key cryptography. In fact, the Wallet is software and it has two types, Full clients and Lightweight clients.

  • Ensures payment transaction anywhere in the world
  • No border crossing issues and rescheduling for bank holidays
  • Ensures secure transaction of money
  • Personal information is kept hidden that protect identity theft
  • Merchants are secured from fraudulent activities
  • The good news is that the network does not charge double. Many traders accept the payment immediately without any loss

As a result, it has been acknowledged that this payment system of cryptocurrency is secured and is in demand worldwide. This system is rapidly attracting merchants.

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