The widespread recognition of bitcoin is a matter of great controversy globally. The details are explained in this article.
Bitcoin Core Software
Bitcoin Core Software is open-source software, which acts as a focal point for discussions of bitcoin rules. It is licensed under MIT license, which is rather a permissive open-source license. The implication of this is that software can be used for so many purposes. The core software consists of the bitcoin software. People who are building an alternate version of Bitcoin Software often copy the rules that define some components of the Core software. They often focus on the part that checks the validity of the block, and they try to model it around the core software. Hence, this is the focal point that defines the rules.
Another related important tool is the Bitcoin Improvement Proposal (BIPs). This is a formal document that contains the features of the Bitcoin system. Any information, change or update to Bitcoin features are introduced to this document. There are three major types of BIPs: Standard Track BIPs, Informative BIPs, and Process BIPs. Each document must have a reason for implementing an update, and must have an author that will notify the community, and will try to gather a consensus of members to support the implementation of the proposals.
Bitcoin Stakeholders: Who’s in Charge?
In the Bitcoin community, some people hold considerable influence, that varies amongst themselves. They are the stakeholders of the community. There exists a very small number of individuals called the core developers. Indeed, one of them is the pseudonymous Satoshi Nakamoto. Some people consider them powerful, while some consider them not powerful. Both sets of people are right. They are powerful because any change introduced to the core of Bitcoin will be followed by default, and these are the people with the real code to the rule book of Bitcoin core. However, being open-source software, anyone – who can get a copy of the codes – can introduce the change into the system.
The miners are a set of people that check, verify and upload transactions on the Bitcoin Blockchain. When there is a transaction on popular platforms like bitcointrader.site, the so-called miners compete with one another to solve an extremely complex computation problem. The first to successfully solve it is granted the right to check, verify and upload transactions on the blockchain. This is done to assure the security of the technology. The miner also makes sure that no block (in the chain) is duplicated – hence, preventing double-spending. In the end, the miner is rewarded with newly created bitcoins. This is how Bitcoins are created.
Besides, there are certain people that invest in the system. They are the investors. They are also quite influential. Their actions determine the occurrence of “inflation” or “deflation” in the system. Some investors might decide to buy bitcoins in large amounts, and store them for the future. Just as the developers determine the consensus of members, the investors determine the value of Bitcoins. Furthermore, there exist payment exchange services. They “bring the users” close to their money. Users (sellers) get paid when a transaction occurs via the payment services. There are no clear sets of people in charge. The system is a decentralized one and is run in such a way that every stakeholder work hand-in-hand, and power is not concentrated on any set of people.
Roots of Bitcoin
An idea was basically the precursor to the inception of Bitcoin – this is Libertarianism. The handling of financial power made people fear for the worst. It was thought that the society would be better off without government (or minimal presence of the government). Then, the idea was to create a medium where financial transactions can be done in secret – hence the name, cryptocurrency – without a centralized authority. A man who goes by the pseudonymous name of Satoshi Nakamoto – as mentioned earlier – created an article linked to a domain – bitcoin.org. The article was sent to a cryptographic mailing list.
The first receiver of a bitcoin was Han Finley, who was a cypherpunk. Nakamoto allegedly mined one million Bitcoins before disappearing in 2010. It was said that he handed over the code to Gavin Andresen, who then sought to decentralize the system. The first price of a Bitcoin was $0.30 in 2011 and rose to $5.77 for a Bitcoin by the end of that year. At the time of writing, Bitcoin is priced at $58,628.60 for a bitcoin. Statistics predict that presently, Bitcoin could rise as much as $300,000.
Government Stance on Bitcoin
Due to the decentralized nature of bitcoin, several governments have tried to limit its activities in their country. Over the years, Bitcoin’s renown has not only been noticed by individuals, but also by the government of several countries. Indeed, Some fear that Bitcoin can be a medium for illicit activities like Money laundering, or can be used to bypass capital control.
Fiat is the word that describes any conventional currency that is issued by the government, and they control the value of these currencies through the central banking system. Once Bitcoin gains overwhelming popularity, fiat currencies tend to lose their relevance. They are not backed to tangible assets, but by the government that issued them (they can’t be returned to the government to get something in return). They can also track the movement of a fiat currency, but with Bitcoins, it is a different issue entirely.
Furthermore, Bitcoin recognition will almost render the banking system irrelevant. Most Bitcoin users do not use any existing banking system. Their transactions are done in digital secrecy, without the need for a third-party intermediary. Despite the fear that Bitcoin can be a medium for fraudulent activities, its adoption can curb the unnecessary tinkering by the central Banks which leads to recession, aggravated unemployment, and activities of banking systems that condone profiteering and corruption.
Conclusively, this online version of cash is often said to be the future currency. The rise in the number of stakeholders only echoes the fact that its long-term availability is encouraging