Everything about Bitcoin (BTC). Table of Contents

What-is-Bitcoin-Crypto,-virtual-money,-or-electronic-money

What is the difference between virtual currency and Bitcoin?

Virtual currency and Bitcoin, the reason they exist is completely different.

Virtual currency can be used only within a specific game or website and is created on a company-by-company basis, and by enclosing users, the cryptocurrency operator (= game or website operator) can make a profit.

Bitcoin, on the other hand, is a virtual currency created to facilitate economic activities, similar to the yen and dollar, which are operated on a national basis.

Bitcoin is made with the aim of making it “usable” in everyday life around the world.

Since it is a virtual currency, there are no banknotes or coins, but instead, it is made so that you can buy and sell things by using a personal computer or smartphone as a wallet.

Although it is still developing, it is a virtual currency created with the aim of becoming a next-generation currency that is more convenient, stable, and usable around the world than the yen and dollar.

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What is electronic money?

Electronic money exists as a concept similar to virtual currency.

It is a word that often appears in explaining Bitcoin.

If you confuse these, it will hinder your understanding, so let’s organize them.

Electronic money is a means to realize payment electronically (= by exchanging data) without using banknotes or coins.

Some types make payments online, while others are contactless payment methods, which are becoming the mainstay these days.

It is used when getting on a train or paying at a convenience store.

It is a mechanism that is already permeating into daily life, so many people have actually used it already.

It’s very convenient because you don’t have to take out your change from your wallet.

Bitcoin also has the characteristic that it can be used as electronic money.

In the first place, Bitcoin is a virtual currency that does not have banknotes or coins, so it is natural that it can be used as electronic money.

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So is Bitcoin electronic money?

When explaining Bitcoin, it is too flat to explain that it is electronic money.

Electronic money, which is generally used today, basically exists for making electronic payments using the currency used in the area.

In the case of Japan, electronic money is used as a substitute for yen bills and coins to make payments in yen more convenient.

Therefore, the user has to deposit the yen he owns into the electronic money terminal or put the money in the bank account used when paying with electronic money.

Payment is made electronically without using banknotes or coins, but in reality, the currency of the yen is still being exchanged.

Bitcoin does not charge yen to any device.

When purchasing products using Bitcoin, you must first exchange your yen currency for Bitcoin currency.

Only after exchanging yen for Bitcoin can you make payments with Bitcoin.

The flow of payment after exchanging money is the same as general electronic money.

Bitcoin payments are made electronically at stores that accept Bitcoin payments.

Then, the bitcoins you own will decrease and the bitcoins owned by the store will increase.

Bitcoin is a currency.

Unlike the yen and the dollar, it is a virtual currency.

Electronic money is a mechanism that enables payment without using money.

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Benefits of using Bitcoin

Since no nation or company is involved, there are the following merits in remittance between individuals, for example.

You can literally “directly” transfer money between individuals, free or cheap fees, and no monitoring or restrictions.

1. You can literally “directly” transfer money between individuals

When sending money in a common currency, you need to mediate with a bank.

However, in the case of Bitcoin, you can pay directly between individuals.

The advantage of using Bitcoin is that you can pay money directly to the other party with Bitcoin, just as you would meet in person and pay with money from your wallet.

2. Free or cheap fees

There is no intermediary organization, so basically you don’t have to pay any fees.

This is a very important feature for small payments between individuals.

There are certain fees for both bank transfers and credit card payments.

As a result, it becomes difficult to buy and sell small-value products, and the profit margin of the business decreases.

Bitcoin enables payments that overturn the traditional concept of fees, thanks to the direct remittance mechanism, which is one of its greatest advantages.

3. There are no restrictions

Since Bitcoin payments are not made via banks, there are no complicated procedures or restrictions.

You will be able to distribute money more freely.

In addition, there is no feature that the unit of currency differs depending on the country, so using Bitcoin has the advantage that the same currency can be used all over the world.

To that end, it is necessary for Bitcoin to become more widespread and more stores to accept Bitcoin payments, but there are already stores around the world that accept Bitcoin payments.

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Where are Bitcoins stored?

Bitcoin has the concept of a wallet.

In the case of yen and dollars, this is a bank account.

Everyone who uses Bitcoin has a wallet, stores Bitcoin in it, and uses it for payment.

This means that anyone who wants to use Bitcoin needs to create a wallet.

It’s like an email address assigned to an individual.

In reality, the wallet ID is represented by a long string.

Since it is difficult to remember as it is, it will be difficult to transfer money between individuals.

Therefore, in general, a code with a shortened ID is used, or a QR code that can be read by a smartphone is converted and exchanged.

Of course, as with payments in yen and dollars, it is essential that both parties accept payments in Bitcoin.

The settlement is not possible unless the currency of Bitcoin is a “communication” relationship.

This is a huge challenge for Bitcoin, which is still in its infancy, unlike the yen and dollar.

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What you can do with Bitcoin?

What you can do with Bitcoin is the same as with regular currency.

With Bitcoin, you can pay for goods and services, whether you are an individual or a company.

In other words, Bitcoin is a kind of money that can be used in the same way as ordinary currency, it is just virtual.

Unlike currencies such as yen and dollars, Bitcoin payments must be made electronically.

It is natural because it is a virtual currency without physical banknotes and coins.

Since Bitcoin makes payments electronically, it is easy to send money via the Internet.

You can send Bitcoin to someone far away or to someone in front of you in a short amount of time.

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Difference of Fiat Currency and Cryptocurrency

If the currency is exactly the same as the yen or the dollar, there is no need to create a new currency.

What is the decisive difference between Bitcoin and other currencies?

The biggest difference is that there is no “central bank” to control the currency.

Bitcoin does not have an organization that controls issuance or distribution.

Bitcoin is not a virtual currency operated by a nation or a company.

Although it is a currency similar to the yen and the dollar, no country or company is involved in the issuance and distribution of Bitcoin.

This insane concept is the biggest feature of Bitcoin.

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Who manages Bitcoin?

Already mentioned that the currency is not controlled by the state or companies, but who issues Bitcoin and controls its distribution?

Common sense tells us that it’s just a bunch of risks, such as currencies that no one manages.

If someone can issue a large amount of currency and become a rich man in that currency, the credibility of the currency will be lost.

Such unstable currencies do not circulate and no one finds value.

Bitcoin uses a computer network to manage currencies instead of centrally managing them.

The issuance of new currencies and detailed information on transactions in Bitcoin are all distributed and stored on the computer network.

Imagine that there is one large trading ledger that contains all the transaction records made with Bitcoin.

Thanks to this visualized record, you can prevent currency forgery and double payments.

All records remain, but the records do not contain any personal information.

Records exist only to ensure the integrity of Bitcoin distribution.

If a particular organization manages one large transaction ledger, it’s the same currency as before.

Bitcoin is a mechanism that eliminates the need for central management by placing one large transaction ledger on a distributed computer network rather than under a specific organization.

If the data is distributed and stored, even though it is one large transaction ledger to guarantee the integrity of transactions, it is likely that transaction records will be inconsistent.

However, Bitcoin has created this solution and is spreading to this day.

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What is Bitcoin mining?

Bitcoin adds all transaction records to the transaction ledger at regular intervals.

In the processing of the addition, it is required to accurately record the data of the transaction ledger distributed and stored on the network while maintaining the consistency of the data of all transactions that occurred during the period covered by the addition.

The task of achieving that consistency can be achieved by computer calculations, but it requires a huge amount of calculation.

Both the data of one large transaction ledger that is distributed and stored and the data of the transaction to be added must be added after verifying everything accurately.

Therefore, Bitcoin borrows volunteer computer resources for this additional work.

By borrowing the computing power of the surplus computer, we are doing a huge amount of calculations and adding to one big transaction ledger shared by everyone.

Bitcoin will be paid in return to those who helped with this additional work, and those who performed a huge amount of calculation processing for the additional work and succeeded in the additional work as a result. In other words, Bitcoin is paid as a reward for helping the postscript work and working hard to ensure that the entire Bitcoin is operated soundly.

This reward will be paid by the newly issued Bitcoin. In other words, the issuance of new currency occurs at this moment.

New Bitcoin is a small form of gratitude to those who have done a huge amount of calculations and contributed to the development of Bitcoin as a whole, even though they may be playing games or playing online. Is issued.

The actions leading to this new issue is called “mining”. There are people all over the world who are working hard day and night in mining as a business that turns computer computing power into money.

Thanks to that, Bitcoin remains safe today.

New issuance of Bitcoin as a currency can only be done through this mining.

Therefore, people who believe in the development of Bitcoin are focusing on mining activities (= updating one big transaction ledger) one after another.

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Who manages Bitcoin the Cryptocurrency?

If the currency is exactly the same as the yen or the dollar, there is no need to create a new currency.

What is the decisive difference between Bitcoin and other currencies?

The biggest difference is that there is no “central bank” to control the currency.

Bitcoin does not have an organization that controls issuance or distribution.

Bitcoin is not a virtual currency operated by a nation or a company.

Although it is a currency similar to the yen and the dollar, no country or company is involved in the issuance and distribution of Bitcoin.

This insane concept is the biggest feature of Bitcoin.

The total amount of Bitcoin issued is predetermined.

The amount issued by mining has also been adjusted.

Therefore, it is designed to avoid the increase in issuance and inflation, and confusion in an instant.

The total amount of Bitcoin issued is estimated to be 21 million Bitcoin by 2140, and no new Bitcoins will be issued after that.

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Who made Bitcoin?

Bitcoin was proposed in October 2008 by a paper submitted on the Internet by a person named Satoshi Nakamoto.

Only three months later, in January 2009, the software was developed and released as open-source to realize the theory of Bitcoin. And soon, the first Bitcoin transaction is taking place. Developers and those who have owned Bitcoin since that time are said to own Bitcoin with enormous value.

About a year later, in February 2010, the first exchange to exchange Bitcoin was born. And in May of the same year, payment using Bitcoin was made for the first time in the real world.

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