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Paper Wallets4. Liquiditybitcoin краны With no central counterparties controlling the network, bitcoin functions on a decentralized basis and in a state that eliminates the need for, and dependence on, trust. Its distributed architecture reduces the network’s attack surface by eliminating central points of failure that would otherwise expose the system to critical risk. By being built on a foundation of social disorder and only in the absence of control is bitcoin able to function on a secure basis. It is the precise opposite of the trust-based central bank model. Bitcoin is a monetary system built on a market consensus mechanism, rather than centralized control. There are certain consensus rules that govern the network. Each participant opts in voluntarily and everyone can independently verify (and enforce) that the rules are being followed. If any market participant changes a rule that is inconsistent with the rest of the network, that participant falls out of consensus. The network consensus rules ultimately define what is and what is not a bitcoin, and because each participant is capable of enforcing the rules independently, it is the aggregate function of enforcement on a decentralized basis that ensures there will only ever be 21 million bitcoin. By eliminating trust in centralized counterparties, all network participants are able to rely upon and ultimately trust that the monetary policy is secure and that it will not be subject to arbitrary change. It may seem like a paradox but it is perfectly rational. The system is trusted because it is trustless and it would not be trustless without high degrees of social disorder. Ultimately, a spontaneous order emerges out of disorder and strengthens as each exogenous system shock is absorbed.monero ann bitcoin москва

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What is Bitcoin?
The Concept. The technology. The unit of exchange. The protocol. It is all about the Bitcoin.

Everyone can speak obscurely, only the few can speak clearly.

Galileo Galilei
The same goes for Bitcoin explanation. Most definitions are obscure rather than understandable. We will do our best to be among the few who speak clearly.

Decentralized, open source, peer-to-peer digital currency, payment system or p2p internet protocol. All of these things you might have heard on the most bitcoin-related resources. We want to provide a deeper insight in the term Bitcoin.


Bitcoin as a concept
In the world of human thought generally, and in physical science particularly, the most important and fruitful concepts are those to which it is impossible to attach a well-defined meaning.

Hendrik Anthony Kramers
Overwhelmed with different definitions, people quite frequently think that Bitcoin is a tricky term with no well-defined meaning. In the majority they are right. Do not try to refer Bitcoin to something exact - it would make no sense. Try to embrace every piece of the information.

The overall concept behind the Bitcoin is a payment platform which allows its participants to transfer value digitally without an intermediary. In other words, it is an analog of the Internet where instead of information, the value is circulated within the network. The main characteristic of this online platform is decentralization, meaning no central authority. Thus, nobody can lose control of the Bitcoin system as nobody owes it. (As you know, you cannot lose the thing that you don’t owe.)


Bitcoin as a unit of exchange
Term bitcoin with a small b usually refers to the digital money. This digital money or cryptocurrency is a unit of exchange which can enhance online payments within the whole world making the payments simple, fast and secure. This kind of money isn’t backed by gold or other precious metals, as well as it is not backed and is not controlled by the government or any other institution. The supply of bitcoins is fixed at 21 million bitcoins.

Note: You need to differentiate the Bitcoin and the bitcoin terms. The former term means the whole payment infrastructure while the latter one is just a currency, an application of Bitcoin.


Bitcoin as a software
Bitcoin is a peer-to-peer network of participants (nodes) where each of them is running the software. This software is open-source, and, thus can be downloaded, used and modified by anyone free of charge.
Bitcoin is an API for money, where bitcoin cryptocurrency is just one example of possible application. Instead of it there can be smart contracts.
Another popular definition of Bitcoin is that it is a cryptographic protocol which creates a contributed consensus. To understand the protocol term it is enough to compare it with API.
Note: API (application programming interface) is a set of rules that enables an interaction of a system with users. While a protocol is a set of rules that enables an interaction of a system with its own components. E.g. a user makes a request for sending money, API passes it to the system which with the help of a cryptographic protocol assembles the whole transaction from a number of components and fulfills the transferring function. Voi La, the funds are sent.


Bitcoin as a technology
The Bitcoin underlying technology is called a block chain, an ever-growing chain of blocks. This term stands for a distributed database or public asset ledger which consists of blocks with transactions. Each node of the network has a copy of this database.

To transfer funds the sender needs to sign a message with 1. The transaction amount 2. Receiver info via his / her cryptographic private key. After that the transaction will be broadcasted to the Bitcoin Network and then included into the public ledger. Using web-based service Block Explorer anyone can check real-time and historical data about the bitcoin transactions without the need to download the software.

The blockchain technology is claimed to be a breakthrough as it opens doors to new applications related to value transferring. Smart Contracts is just one example of such application.



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Here we see a pretty strong pattern. During the 12-24 months after launch and the subsequent halvings, money flows into the reduced flow of coins, and the price goes up due to this restricted supply. Then after a substantial price increase, momentum speculators get on board, and then other people chase it and cause a mania, which eventually pops and crashes. Bitcoin enters a bear market for a while and then eventually stabilizes around an equilibrium trading range, until the next halving cycle cuts new supply in half again. At that point, if reasonable demand still exists from current and new users, another bull run in price is likely, as incoming money from new buyers flows into a smaller flow of new coins.

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