Just to remember some general information
What is Bitcoin?
Bitcoin is a consensual network offering a new payment system and completely digital money. It is the first decentralized peer-to-peer payment system supported by its users without a central authority or intermediaries. From a user's perspective, Bitcoin is a big money for the Internet. Bitcoin can also be seen as the most prominent existing triple entry accounting system.
Who controls the Bitcoin network?
No one controls the Bitcoin network as no one owns the technology behind the email. Bitcoin is controlled by all Bitcoin users around the world. While programmers are improving software, they can not force a change in the Bitcoin protocol because all users are free to choose which software and version to use. To stay compatible with each other, all users must use software that complies with the same rules. Bitcoin can work correctly only when there is consensus among all users. So, all users and programmers have a strong motivation to protect this consensus.
How does Bitcoin work?
From the perspective of a regular user, Bitcoin is nothing more than a phone application or a computer program that offers a Bitcoin personal wallet and allows a user to send and receive bitcoins through it. This is how Bitcoin works for most users.
Behind the scenes, the Bitcoin network distributes a public register called the "block of blocks." This registry contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by the digital signatures that correspond to the addresses where the bithocks were sent, allowing all users to have full control over the bitcoins sending from their personal Bitcoin addresses. Additionally, anyone can process transactions using the computational power of specialized hardware and be rewarded with bitcoins for this service. This is often referred to as "mined". To learn more about Bitcoin, see the dedicated page and the original work.
How difficult is it to make payments with Bitcoin?
It's easier to trade with Bitcoin than to buy with a debit or credit card, which can be received without a merchant account. Payments are made directly from a wallet application, either from your computer or your mobile, by entering the recipient's address, the amount, and pressing the Send button. To make container addressing even easier, many wallets can get the address by scanning a QR code or joining two phones that benefit from NFC technology
Economy
How are Bitcakes created?
New Bitcoins are generated through a competitive and decentralized process called "mining". This process also involves a reward for those who offer this service. Bitcoin miners process transactions and secure the network using specialized hardware and collect new bitcoins created in exchange for the work they have done.
The Bitcoin protocol is designed in such a way that new bitcoins are created at a fixed rate. This makes the Bitcoin mining a very competitive business. When more miners join the network, it becomes surprisingly difficult to make a profit and the miners need to become more efficient in order to reduce their operating costs. No central authority or programmer has the power to control or manipulate the system to increase their personal profit. Every Bitcoin node in the world will reject anything that deviates from the rules the system expects to follow.
Bitcoins are created at a decreasing and predictable rate. The number of new bitchers created each year is halved periodically until bitcoin generation stops completely when there are 21 million bitcoins. At this point, Bitcoin miners will probably be rewarded exclusively by the many small transaction fees.
What are the advantages of Bitcoins?
Freedom of payments - You may send and receive any amount of instant money anywhere in the world at any time. No days when the banks are closed. No limits imposed. Bitcoin allows its users to have full control over their money.
Very low taxes - Bitcoin payments are currently processed either without taxes or with very low taxes. Users may optionally include a fee to take priority in processing the transaction, resulting in a faster confirmation of transactions by the network. Additionally, there are commercial processors assisting traders in processing transactions, changing bitcoins in a hard currency, and daily depositing funds directly into the merchant's bank account. These services are based on Bitcoin, they can be offered at much lower fees than PayPal or credit card networks.
Fewer risks for traders - Bitcoin transactions are safe, irreversible, and do not contain customer information. This protects traders from damage caused by fraudulent fraud or chargebacks, and PCI compliance is not required. Traders can easily expand to new markets where credit cards are not available or fraud rates are unacceptably high. Net results are lower taxes, wider markets and lower administrative costs.
Security and control - Bitcoin users have total control over transactions; it is impossible for traders to force undue or hidden charges or payments as might happen through other methods of payment. Bitcoin payments can be made without personal information being linked to the transaction. This provides increased protection against identity theft. Those who use Bitcoin can also protect their money by backing up and encrypting.
Transparent and neutral - All Bitcoin money information is available at any time in the block of blocks and can be checked by anyone and used in real time. No individual or organization can control or manipulate the Bitcoin protocol because it is secure from a cryptographic point of view. This allows Bitcoin to be completely neutral, transparent and predictable.
What are the disadvantages of Bitcoin?
Acceptance - Many people still have not heard of Bitcoin. Every day, more and more businesses accept bitcoins because they want the benefits associated with it, but the list is still small and needs to grow to benefit from the network effect.
Volatility - The total bithole value in circulation and the number of companies using Bitcoin is still very small compared to what it might be. So, relatively small events, speculation, or the activities of certain firms can greatly influence the price. In theory, this volatility will shrink as Bitcoin markets and technology will mature. There has never been such a coin, so it is quite difficult (and thrilling) to imagine what will happen.
Continuous development - Bitcoin software is still in a beta stage with many incomplete options still in active development. New tools, options and services are being developed to make Bitcoin safer and more accessible to the masses. Some of them are still not ready for everyone. Most Bitcoin-based businesses are in the beginning and do not yet provide any insurance. Generally, Bitcoin is still in the maturation phase.