Bitcoin: New Digital Payment System
Bitcoin is a new digital asset and a digital payment network. It is the first centralized peer-to-peer payment network that is powered by its users with no central authority or middle man. It was released as an open software in 2009. The bank have no relation with this digital system of payment. It is a world wide payment every body can take part. It is the currency of the internet.
It is an open source software. That means no person, company or country owns this, no one owns the internet. It is designed by the public, no body owns & controls the bitcoin. This transaction take place for users directly without an intermediaries like a bank, a credit card company or a clearing house.
We all trust a bank in our transactions by holding our money and they lend it to others. We have to trust them as they keep privacy. With e-currency transaction, there is no need to trust a third party middleman, we can secure our money and do transactions easily. Here bitcoin is the solution for this things.
Bitcoin can be used to buy things electronically. Bitcoins can be traded for goods or services with vendors who accept Bitcoins as payment. Bitcoin wallet keep a secret piece of data called a private key which is used to sign transactions.
Anyone can use the bitcoin transactions, if you join with internet you can help to verify and record payments into the block chain. This process is called mining. The mining process involves compiling recent transactions into blocks and trying to solve a difficult thing. Anyone with internet connection and proper hardware can participate in bitcoin.
The security of the bitcoin depends on the decentralization. Bitcoin network makes decisions, it is effectively made by the simple majority consensus, that is, greater than the half of the mining power agrees. If an individual or an organisation has the control of greater than the half of the mining power, then they have the power to corrupt the block chain.
Characteristics of Bitcoin Payment System
- It is decentralized
- It is easy to set up
- Every body with internet connection can be take part
- Users can hold multiple bitcoin addresses
- It is completely transparent
- No transaction fees
- Bitcoin is the fastest network