How is the Bitcoin Network Secured? - Deepstash
How is the Bitcoin Network Secured?

How is the Bitcoin Network Secured?

Bitcoin is secured with the SHA-256 algorithm, which belongs to the SHA-2 family of hashing algorithms, which is also used by its fork Bitcoin Cash (BCH), as well as several other cryptocurrencies.

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What is Bitcoin’s Role as a Store of Value?

Bitcoin is the first decentralized, peer-to-peer digital currency. One of its most important functions is that it is used as a decentralized store of value.

In other words, it provides for ownership rights as a physical asset or as a unit of account. Many crypto enthusiasts and economists believe that high-scale adoption of the top currency will lead us to a new modern financial world where transaction amounts will be denominated in smaller units.

For many of us, Bitcoin is considered a store of value, like gold, rather than a currency.

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The Lightning Network is an off-chain, layered payment protocol that operates bidirectional payment channels which allows instantaneous transfer with instant reconciliation. It enables private, high volume and trustless transactions between any two parties. 

The Lightning Network scales transaction capacity without incurring the costs associated with transactions and interventions on the underlying blockchain.

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Bitcoin’s most unique advantage comes from the fact that it was the very first cryptocurrency to appear on the market.

It has managed to create a global community and give birth to an entirely new industry of millions of enthusiasts who create, invest in, trade and use Bitcoin and other cryptocurrencies in their everyday lives.

The entire cryptocurrency market is based on the idea realized by Bitcoin: money that can be sent and received by anyone, anywhere in the world without reliance on trusted intermediaries, such as banks and financial services companies.

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What is Bitcoin (BTC)?

Bitcoin is a decentralized cryptocurrency originally described in a 2008 whitepaper by a person, or group of people, using the alias Satoshi Nakamoto. It was launched in January 2009.

Bitcoin is a peer-to-peer online currency, meaning that all transactions happen directly between equal, independent network participants, without the need for any intermediary to permit or facilitate them. Bitcoin was created to allow “online payments to be sent directly from one party to another without going through a financial institution.”

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Bitcoin is almost synonymous with cryptocurrency, which means that you can buy Bitcoin on virtually every crypto exchange - both for fiat money and other cryptocurrencies. Some of the main markets where BTC trading is available are:

  • Binance
  • Coinbase Pro
  • OKEx
  • Kraken
  • Huobi Global
  • Bitfinex

If you are new to crypto, use CoinMarketCap’s own easy guide to buying Bitcoin.

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The most popular wallets for cryptocurrency include both hot and cold wallets. Cryptocurrency wallets vary from hot wallets and cold wallets:

  • Hot wallets are able to be connected to the web. Some of the top crypto hot wallets include Exodus, Electrum and Mycelium.
  •  Cold wallets are used for keeping large amounts of coins outside of the internet. Some of the top crypto cold wallets are Trezor, Ledger and CoolBitX

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New coins are created during the process known as 'mining'.

As compensation for spending their computational resources, the miners receive rewards for every block that they successfully add to the blockchain.

At the moment of Bitcoin’s launch, the reward was 50 bitcoins per block: this number gets halved with every 210,000 new blocks mined — which takes the network roughly four years. As of 2020, the block reward has been halved three times and comprises 6.25 bitcoins.

Mining Bitcoins can be very profitable for miners, depending on the current hash rate and the price of Bitcoin.

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Bitcoin’s original inventor is known under a pseudonym, Satoshi Nakamoto. As of 2020, the true identity of the person — or organization — that is behind the alias remains unknown.

Over the years a large number of people have contributed to improving the cryptocurrency’s software by patching vulnerabilities and adding new features.

Bitcoin’s source code repository on GitHub lists more than 750 contributors, with some of the key ones being Wladimir J. van der Laan, Marco Falke, Pieter Wuille, Gavin Andresen, Jonas Schnelli and others.

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At this moment (Monday, May 24, 2021), there are almost 18,713,700 BTC in circulation

Bitcoin’s total supply is limited by its software and will never exceed 21,000,000 coins

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Edward Arthur Seykota

Risk no more that you can afford to lose, and also risk enough so that a win is meaningful.

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The current valuation of Bitcoin is constantly moving, all day every day. It is a truly global asset. From a start of under one cent per coin, BTC has risen in price by thousands of percent to the numbers. 

The prices of all cryptocurrencies are quite volatile, meaning that anyone’s understanding of how much is Bitcoin will change by the minute. 

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What is Polkadot (DOT)?

Polkadot is a network protocol that allows arbitrary data —not just tokens— to be transferred across blockchains.

This interoperability seeks to establish a fully decentralized and private web, controlled by its users, and simplify the creation of new applications, institutions and services.

Polkadot can transfer this data across public, open, permissionless blockchains as well as private, permissioned blockchains.

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Supply

The supply of bitcoins in the world is capped at 21 million and, currently, about 18.7 million have been mined. The production of new coins is slowed every four years or so, with the number of coins minted upon completion of a block cut in half each time.

The limited supply is one of the things that makes Bitcoin attractive to many people. Decentralization means it is unlikely that any one person or group could gain control of the ledgers or enough of the currency to manipulate its value.

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Cryptocurrency as a mode of payment

In the financial transactions sphere, we have various modes of payment for goods and services. For example, we have PayPal, Amazon Pay, Apple Pay, cryptocurrency, etc.

Cryptocurrency is a relatively new system that people still try to figure out. There are currently over 2,000 types of cryptocurrency.

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