In ancient days people used to barter products. They sold half Kilo Tomatoes for one Kilo Rice. There were a lot of issues in this barter system. So people started to use metals to buy products and trade. The main issue was if you had 10 Kilo Gold you have to take the gold with you. This issue was resolved by the Paper Currency. The Countries started to print paper currency according to their gold reserves. After many years this became a Failure model. The People started to use paper money for all purposes. The Countries gave a value for their currencies. This is how they started to print various Paper money with different values. The govt has approved this paper money this is the reason people call it currency. Now for Ex: If I work and earn money which I give to my friend.
When I transfer the money to my friend I have to pay a fee to the govt. There are many issues while transferring money. If My friend lives abroad there will be a huge processing fee. There are groups that monitor our transactions. This is called Centralized System. Many people believe that this system is invading our Privacy. Can they create a new money world that will not invade our privacy? In 2008 they released a White paper. Through this white paper method, we obtain Bitcoin. This is Bitcoin Series Part1. Greetings from TamilPokkisham We have discussed the reason behind the creation of Bitcoin. We have to obtain In-depth Knowledge to understand the Pros and Cons of Bitcoin.
If you search in google regarding Bitcoin you may get a lot of results. But the real issue is to educate the people in a non-Complicated way. Let's start with an example. There is a photocopy with me. But my friend has not seen that photo. So I send the photocopy through email to my friend. He receives the Copy. Now he can view the photo, Delete it or share it with his friends.
The Photocopy is shared with many. But the Source image is a copy. So the image we send is another copy. Using this method, Why can't we take a copy of the money? I have a 100rs. If I send the copy of the money it will be another 100rs. Now we identify this money as fake money. When a copy of money is made it will affect the economy. They can use the money copy to buy products. So there are many issues when copying a Currency. When this is the situation, How are we believing in bitcoin? People believed in Paper Money because the govt approved it. It is a faith we blindly follow because of our govt. When this faith becomes maths, it becomes bitcoin.
In 2008-2009 a person published a white paper. The Creator says that this Currency is not controlled by a Centralized System, Individual or group. This Currency will be a general Currency for all. This currency was called Bitcoin. In 2009 Bitcoin was introduced to the world. Many people take the decision of recognizing the currency. But at that time the Bitcoin value was 0. For Ex: If someone gives me 5 Bitcoins. I send that 5 Bitcoins to my friend. He sends the 5 Bitcoin to another friend. How did the first person receive this bitcoin? This question leads to another question, How was the First bitcoin created? Gold and metals are gathered through mining. They dig up a mine. There will be Mineral sand. But after digging and searching through these Mineral sands we can find gold.
This process was used in Bitcoin mining. This is also called Cryptocurrency mining. We only use one technology called the BlockChain Technology. Getting back to the Example. The 5 bitcoins given is recorded in a ledger. This accounting ledger is not under the control of anyone If we have rs100, we can trace the Paper rupee through RBI. When the govt traces the bank accounts and assets. RBI can identify the numbers of paper money which I have in my accounts. But if I have a debt to another person. That Person cannot look into my accounts. This is a centralized system that is under the control of the Govt. The Govt officials can retrieve the bank details, balance, or CIBIL Score can be viewed. This is the Centralized system. The De-Centralized System allows anyone to look into my account. This is the reason behind the creation of Bitcoin. The Purpose is not to believe in any form of govt, individuals or Corporates or business owners. Freedom for all is the Bitcoin. We can say that the next Gen Currency is Cryptocurrency.
So I have given 5 Bitcoins to my friend which is recorded in the ledger. So when that person gives the 5 Bitcoins to another person. This will create a block of data. This block of data will only have a sender and receiver. So when various use Bitcoins new ledgers are created. This block will be connected through a chain. This is called BlockChain technology. There are complex terms and wordings behind this technology. We will discuss the in-depth Information in the upcoming posts. The Block of data in the technology, if there are 10 computers the data will be distributed.
This data will be public. Can everyone see another person's bitcoin numbers? This is blocked by hashing. For Ex: There is a Facebook account and a profile picture for Actor Vijay. If we take the Picture and use it in our profile. Facebook will send a warning regarding the Duplicate account. How is Facebook within a second comparing images? The Answer to this question ends with Hashing. People who have studied computer technology will know details regarding Hashing. There are various methods in Hashing. SHA128, SHA256 and many more. Hashing is taking a photo that has Pixels that says the value of the file.
Some images might be 1MB and so on. For every byte a string is created which is equal to the byte. This will be in a hexadecimal format. For an image, they will add a hash. When another person shares the same image. A new string will be created. This new string will be compared with other strings. If it is the same value then the system sends a warning message to the user. Using Hashing the Cryptocurrency, BlockChain and Bitcoin work. This hashing is the data ledger. In a block, there may be many strings.
These strings can be used to identify the sender and receiver. This is simple information. In this process, How will the First Bitcoin be created? Bitcoin is just software. When you run an algorithm you will get an output. This output is changed into a block. When a Block is created, One Bitcoin has been created. This Bitcoin is sent to other people. When it is sent another bitcoin is created. We cannot answer this question, How many tons of gold can we discover on earth? Gold can be discovered anywhere in the world. But in Bitcoin, they can only create 21 Million Bitcoins. This is the source code in the software. So Only 2 Crores of Bitcoins can be created. These 2 crores will be created within Feb 2140. So after 120 years from now, all Bitcoins will be created. How many bitcoins have been created? The Numbers are 1,87,49,318.75 Bitcoins. Now if you have high-end computers and Equipment.
It will take 5 years to mine one Bitcoin. Now you may be confused by the terms used in this post. Hashing, Bitcoin is created through Mining. Can normal people mine Bitcoin? Can people steal bitcoin? We discussed the ledger, the Block of data, and the Blockchain. Can they hack this system? What are the risks behind Bitcoin? Can you trade with Bitcoin? You may have many questions. This first post in just an introduction. People who know about Bitcoin could have understood these terms For people who don't know about Bitcoin, this series is for you. Please try to understand Cryptocurrency because the Future is Cryptocurrency. Digital Rupees will be used in India. In China, it will be the digital Yuan and In America, it will be Digital Dollar. Please try to understand the concept as it could help you in the future. You may have many questions. Please comment if you didnt understand the Technical terms. Please Comment and Subscribe Sharing good Content to create a great Community.
