Bitcoin is an electronic currency, a computer protocol and a digital asset or unit of account or in simple words its cryptocurrency. The planning of the protocol was released in 2008 under a pseudonym Satoshi Nakamoto.
BITCOIN GENERAL CONCEPTS
To begin describing the overall functioning of the bitcon pro, here is about out the essential concepts on which the system is predicated.
This is a user’s virtual address, which contains bitcoins and which is employed to form and receive payments, almost like a checking account. A given user can have as many addresses as required , and that they are identified by a public key.
A virtual space, like a physical wallet, where a user’s Bitcoin addresses and therefore the payments made with these are stored and managed.
A transaction may be a transfer of cash from Bitcoin address A to a different address B. To create a transaction, the owner of address A signs a transcription of address B (amongst other data) with the private key associated with address A, so that the whole network knows that the new legitimate owner is that the owner of address B.
This is the general public record of verified Bitcoin transactions in chronological order. When a block has been confirmed, through mining, it’s included as a part of the chain.
It is the method of completing mathematical calculations within the Bitcoin network.
- Bitcoin’s design and attributes: In Bitcoin information is managed by the users as a whole. In this way, whenever quite half the users of the system are honest, the “rules” began by the system can’t be broken by any dishonest users.
- Crptography: It is not unreasonable to believe that algorithms that are secure today won’t be tomorrow. It is for this reason that the system is designed in such a way that the cryptographic system used can be changed, using the same peer-to-peer protocol and transaction management. It is simply an issue of allowing, should it’s necessary, new transactions to use a special cryptographic system.
- Scalability: The most recent data from Bitcoin Watch show that around 2,500 transactions an hour- about 0.7 per second – are performed. The network would need to experience spectacular growth indeed to succeed in the theoretical limits of its functioning. Bitcoin keeps an inventory of all the transactions that are realized within the network since its beginning.
- Vulnerabilities: Vulnerabilities have been discovered in the different implementations that have appeared, which can be exploited by malicious users for different ends, from the theft of bitcoins or double-spending, to causing the whole network to malfunction.
- Theft from wallets: By default, most wallets are stored unencrypted, which makes the appearance of malware specifically designed to rob wallets possible. However, there are exist wallets which include the option of encryption.
- Unencrypted traffic: According to how Bitcoin functions, a malicious user can spy on another user’s traffic and identify the transactions they carry out by simply comparing incoming and outgoing transactions.
Don’t make hasty decisions
Trading emotionally is by far one of the worst things you can do. The fear of getting lost (or TMAP) can be a real killer, especially when you see a coin rise quickly and buy at a high, and then it crashes and you sell with panic loss.
Patience can be very beneficial, except when you have a good reason (backed by your own research) to believe that it is a good opportunity for buying and selling.
Do not try to measure the market
One of the holy grails of marketing is buying cheap and selling expensive. This is often easier said than done, which means that some people – through the precipitous decisions mentioned above and panic – invariably buy expensive and sell little.
A hint of the change of alt-coins
Look for coins that have a large daily volume of change and an active community . Some communities also have chat groups (sometimes unofficial) on Telegram, Slack or Discord. It is also a good idea not only to distribute your investment over different assets, but also to distribute them over time. This means not buying or selling everything at once, but doing it in small increments.