1 – What is Bitcoin Cryptography (BTC)?
- Basic principle : With more than a decade of existence, Bitcoin is the reference digital currency in the world with the highest capitalization. It is a decentralized protocol that has the particular objective of offering an ecosystem through its BTC currency, accessible to all and independent of States and traditional currencies. This crypto has the particularity of having a ceiling of 21 million bitcoins that will be put into circulation.
- Use : The network is protected by miners who verify all transactions made on this network. To be confirmed, the transactions are included in a block that must correspond to very precise cryptographic rules that will be verified by the network itself. All the transactions of the Bitcoin network that are registered, each individual, user or not, can access it at any time.
2 – The project and the blockchain behind Bitcoin
- Project : This is a particularly large and dynamic project, with several developer teams from around the world working on different aspects of this project. As the source code is free, freely accessible and royalty-free, any developer can contribute to the construction of Bitcoin. Some well-known teams are directly involved in its development: Bitcoin StackExchange or Bitcoin Core’s Slack.
In addition to the development of the Bitcoin ecosystem, there are also many free software projects that developers can work on, such as Bitcoin Wallet, BFGMiner or Armory.
- block chain : Bitcoin is based on the principle of Proof of Work (proof of work) and on the implementation of a chain of blocks, that is, an open registry that records all the operations and data related to its activity since its creation. Anyone can freely consult the operations at any time, this is the very essence of the independence and security of the system.
3 – Analysis and opinion about this cryptocurrency (BTC)
- Due to its long history, this cryptocurrency has the most developed ecosystem, very high liquidity and is the most established with brands and merchants from all over the world.
- This cryptocurrency also has interesting features for companies, particularly in terms of security (with multiple signature authorization) and its accounting transparency.
- This ecosystem is considered very/too energy intensive due to the complexity of the calculations required for mining. Its production is also mainly localized in countries where electricity is cheaper. This increases the profitability of the mining activity. Due to the use of Proof of Work, the conversion of Bitcoins to fiat currency and transactions in general involve significant costs. Finally, transaction speeds and fees fluctuate greatly based on mining efficiency and network congestion.
4 – How to earn or mine Bitcoin?
Bitcoin and its BTC token are the benchmark for cryptocurrency mining. To do this, we use the computing power of thousands of clustered computers. The goal is to secure transactions and solve extremely complex mathematical problems. In exchange for their contribution, the “miners” are paid in bitcoins.
Using Proof of Work doesn’t work to do bet and therefore generate a reward. The only alternative for Bitcoin users is to use HODL. In other words, the investor acquires BTC and holds it while accumulating others during large pullbacks. The goal is to multiply the holding of this currency over time.