What is Bitcoin ?

What is Bitcoin:

• Bitcoin is a form of digital currency (Peer-to-Peer Currency or Crypto-Currency), created and held electronically. 
• No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems. (Data Mining)

• Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.
• However, major difference to conventional money, is that it is decentralized. No single institution controls the bitcoin network.
• There are an estimated 700 Bitcoin-like crypto-currencies 
• E.g. Bitcoin, Ethereum, Ripple, Litecoin, Monero, Dash, Augur, NEM, Waves etc

• Bitcoin uses Blockchain Technology and is just one implementation of Blockchain
• Bitcoin has been called “digital gold,” and for a good reason

Who Prints/Generates it?

• No one. This currency isn’t physically printed in the shadows by a central bank.
• It's not like conventional currency based on gold or silver. Bitcoin isn’t based on gold; it’s based on mathematics (Bitcoin Mining). I.e. Bitcoin is created digitally (Thru Bitcoin Mining), by a community of people that anyone can join. Bitcoins are ‘mined’, using computing power in a distributed network. 

Well you can certainly buy bitcoins on the open market, but you can also mine your own if you have enough computing power. After covering your initial investment in equipment and electricity, mining bitcoins is simply a case of leaving the machine switched on, and the software running and making bitcoins.

• Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical formula is freely available, so that anyone can check it.
• The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to.

The bitcoin protocol – the rules that make bitcoin work – say that only 21 million bitcoins can ever be created by miners.

Bitcoin Characteristics?

1. Decentralized :The bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together. That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown
2. Easy Set-up: Unlike conventional banks which takes enough time to simply open a bank account. Setting up a bitcoin address in seconds, no questions asked, and with no fees payable.
3. Anonymous: Well, kind of. Users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information. However…
4. Transparent:  Bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain. The blockchain tells all. If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. They just don’t know that it’s yours.
5. No/Minimal Charges: Your bank may charge you a £10 fee for international transfers. Bitcoin doesn’t.
6. Very Fast: You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.
7. No Chargebacks/Fraud: Once bitcoins have been sent, they’re gone, no way of reversing the transaction. A person who has sent bitcoins cannot try to retrieve them without the recipient’s consent. This avoid frauds with credit cards, in which people make a purchase and then contact the credit card company to make a chargeback, effectively reversing the transaction.
8. Safe & Secure: Bitcoin is a relatively private currency. In conventional transactions, you know where transactions came from, and where they’re sent. However here, no one knows who holds a particular bitcoin address. Also Bitcoin transactions, don’t require you to give up any secret information. Instead, they use two keys: a public key, and a private one. Anyone can see the public key (which is actually your bitcoin address), but your private key is secret.
9. Not Inflationary: The problem with regular fiat currency is that governments can print as much of it as they like frequently (e.g to pay-off debt), and take newly created money and inject it into the economy, via a much-publicized process known as Quantitative Easing. This causes the value of a currency to decrease. I.e. If you suddenly double the number of dollars in circulation, then that means there are two dollars where before there was only one. Someone who had been selling/buyinh a chocolate bar for a dollar will have to double the price to make it worth the same as it was before, because a dollar suddenly has only half its value. This is called Inflation, and it causes the price of goods and services to increase and can decrease people’s buying power. Bitcoin was designed to have a maximum number of coins. Only 21 million will ever be created under the original specification. This means that after that, the number of bitcoins won’t grow, so inflation won’t be a problem. In fact, deflation – where the price of goods and services falls – is more likely in the bitcoin world.

Buying Bitcoin:

• You can buy bitcoins from either exchanges, or directly from other people via marketplaces.
• You can pay for them in a variety of ways, ranging from
• Hard cash 
• Credit/Debit cards
• Wire transfers, or
• With other cryptocurrencies
• Credit Cards: In the US, Coinbase, and Circle offer purchases with credit cards.
• Face-to-face, or 'Over-the-counter' (OTC): If you live in a city, prefer anonymity or don't want bank hassles, the easiest option to acquire bitcoin is to make a face-to-face trade with a local seller.
• Bitcoin ATMs: Though a relatively new concept, bitcoin ATMs are growing in number. Different vendors including BitAccess, CoinOutlet, Genesis Coin, Lamassu and Robocoin.

Bitcoin Wallets:

• After buying, you will need a place to store your new bitcoins. In the bitcoin world, they're called a 'wallet' but it might be best to think of them as a kind of bank account.
• Depending on the security levels you want, different wallets will provide different levels of security. The main options are: 
• Software wallet stored on the hard drive of your computer, 
• Online, web-based service or
• 'Vault' service that keeps your bitcoins protected

Ref: https://www.coindesk.com/information/how-can-i-buy-bitcoins/

Who accept Bitcoins as Payment:

Bitcoins are taking over the crypto-currency marketplace. They’re the largest and most well-known digital currency. Many large companies are accepting bitcoins as a legitimate source of funds. They allow their online products to be bought with bitcoins. Here is the list of companies accepting BitCoin as payment. Below is snapshot of buying thru BitCoin at Expedia:

Hope this helps!!

Arun Manglick

What is BlockChain

What is Blockchain?

Blockchain is a software protocol (underlying internet transportation layer) that guides internet to how to send money or asset over internet (same as SMTP is a software protocol for sending/receiving emails over the internet). The way we need an email address to know (whether gmail/yahoo etc) to send emails, same is in Blockchain you need  digital wallet address to send Bitcoin or other Crypto Currency.

The blockchain concept originally was developed as an efficient and secure way to manage and register transactions made with crypto-currencies (for example, Bitcoin). Until now, it has mostly been of interest to individuals and financial institutions. With its Distributed-Ledger Technology (DLT) and Smart contracts, blockchain has great potential to benefit all companies across the global supply chain—not just banks. 

Blockchain is a public ledger of all Bitcoin transaction occurred.

A Blockchain is a distributed computing architecture where every network node executes and records the same transactions, which are grouped into blocks. Only one block can be added at a time, and every block contains a mathematical proof that verifies that it follows in sequence from the previous block. In this way, the blockchain’s “distributed database” is kept in consensus across the whole network. Individual user interactions with the ledger (transactions) are secured by strong cryptography. Nodes that maintain and verify the network are incentivized by mathematically enforced economic incentives coded into the protocol.

Bitcoin is just an application (uses Blockchain Technology) and is just one implementation of Blockchain like another crypto-currency applications.

Blockchain resolved the problem of 'Double Spent', where after Bitcoin is received in your wallet, it cannot be copied to make multiple copies. This is done using a 'Distributed Ledger' system (like a big giant Google Spreadsheet accessible to all).

More Technically:

• Decentralized/Distributed DB and a Peer-to-Peer Network - that stores a registry of transactions.   
• Offer Peer-To-Peer Transaction. I.e. No Third Party/Middle-Man is Involved
• A type of distributed ledger. Well not all BC ledgers are distributed
• Incorruptible digital ledger of economic transactions and can be programmed to record not just financial transactions but virtually of any value.

• Information held on a blockchain exists as a shared — and continually reconciled — database. 
• The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. 
• No centralized version of this information exists for a hacker to corrupt. 
• Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.
• Has no single point of failure.

Simple Example:

• Google Docs/Sheets
• Picture a spreadsheet duplicated thousands of times across a network of computers and this network is designed to regularly update this spreadsheet.
• With Google Docs (or Google Sheets), both parties have access to the same document at the same time, and the single version of that document is always visible to both of them. It is like a shared ledger, but it is a shared document. 

• Wallet:
• BC potentially cuts out the middleman for these types of transactions.  
• Personal computing became accessible to the general public with the invention of the GUI, which took the form of a “desktop”. 
• Most common GUI devised for the blockchain are the so-called “wallet” applications, which people use to buy things with Bitcoin, and store it along with other crypto-currencies.

Peer-2-Peer Network:

• A network of so-called computing “nodes” make up the blockchain.
• Computer connected to the blockchain network using a client (e.g. Slack) performs the task of validating and relaying transactions.
• Each client gets a copy of the blockchain, which gets downloaded automatically upon joining the blockchain network. 
• Every node is an “administrator” of the blockchain, and joins the network voluntarily. However, each one has an incentive for participating in the network: the chance of winning Bitcoins.)

Typical BlockChain Transaction:

• Request: Someone request a transactions
• Broadcast: This transactions is broadcast to a P2P network, consisting of computers, called as 'Nodes'
• Validation: This network of nodes, validates the transactions and user status using known algorithms.
• (Note: A verified transaction can involve 'Crypto-Currency', contract, records and other information)
• Combine (To form new block of data): Once verified, this transaction is combined with other transactions to create new block of data for the ledger
• Add to Existing BlockChain - This new block of data is then added to existing BlockChain, and becomes permanent and unalterable
• Complete - Transaction is marked complete

Type of Blockchain:

• Public Blockchain - 
• Fully De-centralized
• Anyone can read & download transaction
• Ethereum and Bitcoin uses Public BC
• Consortium Blockchain
• Partially De-centralized
• Controlled by pre-selected set of nodes
• Private Blockchain
• Centralized
• Banks prefer Private Blockchain

Cryptocurrency /Crytographic Wallet:

Reference - Link 
A Cryptocurrency wallet is a secure digital wallet used to store, send, and receive digital currency like Bitcoin. Most coins have an official wallet or a few officially recommended third party wallets. In order to use any Cryptocurrency you will need to use a Cryptocurrency wallet.

Here you can compare Bitcoin, Ethereum & other Cryptocurrency Wallets - Link

Cryptocurrency itself is not actually “stored” in a wallet. Instead, a private key (secure digital code known only to you and your wallet) is stored that shows ownership of a public key (a public digital code connected to a certain amount of currency). There are various digital wallet in app-store. So your wallet stores your private and public keys, allows you to send and receive coins, and also acts as a personal ledger of transactions. Public key (32 bit) is individual's bitcoin address used to transfer bitcoin to another individual.

Below is a screenshot of Bitcoin Wallet.

We typically suggest using an official (or officially endorsed) wallet for any given coin. So, for Bitcoin we would suggest using the Bitcoin Wallet, and for Litecoin we would suggest Litecoin-QT.

There are a number of different types of wallets. Each “type” refers to what type of medium the wallet is stored on and whether or not the data is stored online. Some wallets offer more than one method of accessing the wallet – for instance, Bitcoin Wallet is a desktop application and a mobile app.

• Desktop Wallet: The most common type of wallet. Typically an app that connects directly to a coin’s client.
• Mobile Wallet: A wallet that is run from a smartphone app.
• Online Wallet: An online wallet is literally a web-based wallet. You don’t download an app, but rather data is hosted on a real or virtual server
• Hardware Wallet: Dedicated hardware that is specifically built to hold cryptocurrency and keep it secure. This includes USB devices. These devices can go online to make transactions and get data and then can be taken offline for transportation and security.
• Paper Wallet: You can actually print out a QR code for both a public and private key. This allows you to both spend and receive digital currency using a paper wallet. With this option, you can completely avoid storing digital data about your currency by using a paper wallet.

Hope this helps!!!

Arun Manglick