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Top 5 Essential Features Of Bitcoin

Blockchain

07
Oct 2021
1421 Views 5 Minute Read
top 5 essential features of bitcoin
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Blockchain is a series of documents that store information and that are "linked ". We could even identify it as a huge book to which pages and pages are added. All the pages are numbered, contain a series of data that we have discussed and of which all members of the network have a copy.
 
This technology provides us with security and eliminates the need to have trusted third parties to control the network. Any tampering attempt will be easily detected by the members of the network and will be immediately rejected. Also, the malicious attacker will be kicked out of the network by trusted members.
 
From the boom in 2017 to the present moment, Bitcoin has entered the market's sights as an investment possibility. Despite being prominent in recent years, few people outside the investment bubble understand how digital currency works. Or didn't know.
 
In this post, we've gathered 5 Bitcoin features and answered whether it's worth including cryptocurrency in your investment portfolio.

Understanding Bitcoin

Bitcoin is an electronic payment currency based on a mathematical proof technology called Blockchain that is totally unrelated to financial institutions.
 
Blockchain technology works as a large information record of each financial transaction including the amount of coins transacted, who sent the coins, who received them and when the transfer was made.
 
Each set of transactions is stored in a block and each block has a timestamp. Every 10 minutes, a new transaction block is formed that connects to the previous block, and all of them are verified and registered by “miners” who attest the security and reliability of the transactions through computational intelligence.
 
Bitcoin can be used to shop online and, in this sense, it has the same purpose as conventional currencies such as the real, peso, dollar, euro and many others.

Scarcity

The technology used to “manufacture” Bitcoin is 100% digital and is conditioned to an algorithm that has a generation ceiling for new currencies, which makes the financial asset rarer and subject to appreciation as demand for it increases.

Decentralization: Anyone Can Create Their Own Currency

In 2008, a group of volunteers created a code open source which can be copied and adapted to different systems. From this original code, several companies created their own digital currencies.

Transaction Storage

With blockchain, every detail of Bitcoin transaction is recorded in a large chain blocks, accessible to various computers.
 
In short, anyone who has access to the network can get detailed information about every transaction. However, public Bitcoin addresses are not linked to the name, address or other personal information of the owners, thus ensuring the complete anonymity of those who trade cryptocurrencies.

Irreversible Transactions

A characteristic of Bitcoin is that once the transaction is carried out, it is stored in an immutable block of information, that is, this same Bitcoin cannot be used more than once and the transaction becomes irreversible.
 
This characteristic represents a risk for the investor, after all, if you make a wrong transfer or purchase, you cannot reverse the amount spent.

Taxable Investments

Even though they are independent of financial institutions, investments in Bitcoin are also taxed by Income Tax (IR). The rule applies to profits above R$35 thousand.

Is Bitcoin Worth Investing?

Cryptocurrencies give more autonomy to the investor, but require a degree of responsibility to trade them, as transactions cannot be reversed once they are registered.
 
Another point to be considered is that the asset is not regulated by the Central Bank or by any financial institution, therefore, there is no mechanism that “protects its application”. Therefore, investments in cryptocurrencies are indicated for bold and sophisticated profiles, who already have part of their assets invested in variable income assets and have more knowledge of the market.
 
Before investing, we recommend that you read more content on the subject and, if you don't feel safe, look for specialized brokers.

Is Bitcoin Anonymous?

The anonymity of bitcoin is a contentious issue. Although users defend that bitcoin is not anonymous, the media has spread news about the use of bitcoin by cybercriminals.
 
Among the principles objectives of bitcoin is to prevent intermediaries, such as banks, from knowing what you do with your money and can make a profit from it. It can be said that it was conceived as an anonymous cryptocurrency.
 
Each bitcoin user is identified with an alphanumeric code, which is nothing more than the representation of their bitcoin wallet. There is no direct relationship between this code and the actual holder. No names, no location. For this reason, bitcoin is said to use pseudonyms.
 
However, many people store their cryptocurrencies in third-party virtual wallets, which allow you to store virtual money, but also have contact information for you.
 
Some examples are the exchanges, such as Binance or Coinbase, which offer virtual wallets to their users. By using these services, bitcoin users are fully identified.
 
In addition, all transactions are carried out through a device connected to the internet. Everything you do on the internet is recorded, along with your IP, an identification of the device, where you are, etc.
 
Therefore, although the sender and receiver of a bitcoin transaction are not public, they are traceable.

Bitcoin Is Not Anonymous. A Transaction Can Be Tracked

Despite this, it is also true that the use of bitcoin in the deep web has spread. If two people agree to a bitcoin transaction, they can do it completely anonymously.
 
There are also computer programs to hide the IP, software to carry out anonymous transactions and even anonymous bitcoin cards. In these cases, although it can be traced, it is much more complicated.
 
However, those responsible for bitcoin are working on it. The bitcoin protocol keeps updating. While the mother code that ensures decentralization is untouchable, the digital currency can undergo minor modifications to improve its features and security.
 
Among other things, programmers are currently working to ensure a 100% anonymous network, but whose users are identifiable where necessary.
 
The bitcoin protocol is free and open source. This means that anyone can suggest a code modification.All changes are agreed upon by thousands of expert programmers around the world. This ensures that no one can enter malicious code.
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Harnil Oza is the CEO & Founder of Hyperlink InfoSystem. With a passion for technology and an immaculate drive for entrepreneurship, Harnil has propelled Hyperlink InfoSystem to become a global pioneer in the world of innovative IT solutions. His exceptional leadership has inspired a multiverse of tech enthusiasts and also enabled thriving business expansion. His vision has helped the company achieve widespread respect for its remarkable track record of delivering beautifully constructed mobile apps, websites, and other products using every emerging technology. Outside his duties at Hyperlink InfoSystem, Harnil has earned a reputation for his conceptual leadership and initiatives in the tech industry. He is driven to impart expertise and insights to the forthcoming cohort of tech innovators. Harnil continues to champion growth, quality, and client satisfaction by fostering innovation and collaboration.

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