The Bitcoin Revolution is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin was invented by an unknown person or group of people using the name Satoshi Nakamoto[9] and released as open-source software in 2009.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
[12] As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.[13].
Bitcoin is pseudonymous, meaning that funds are not tied to real-world entities but rather bitcoin addresses. Owners of bitcoin addresses are not explicitly identified, but all transactions on the blockchain are public. In addition, transactions can be linked to individuals and companies through “idioms of use” (e.g.
, transactions that spend coins from multiple inputs indicate that the inputs may have a common owner) and corroborating public transaction data with known information on owners of certain addresses.[40] Additionally, bitcoin exchanges, where bitcoins are traded for traditional currencies, may be required by law to collect personal information.[41].
To heighten financial privacy, a new bitcoin address can be generated for each transaction.[42] For example, hierarchical deterministic wallets generate pseudorandom “rolling addresses” for every transaction from a single seed, while only requiring a single passphrase to be remembered to recover all corresponding private keys.[43] Researchers at Stanford University and Concordia University have also shown that bitcoin exchanges and other entities can prove assets, liabilities, and solvency without revealing their addresses using zero-knowledge proofs.
[44] “Bulletproofs,” a version of Confidential Transactions proposed by Greg Maxwell, have been tested by Professor Dan Boneh of Stanford.[45] Other solutions such Merkelized Abstract Syntax Trees (MAST), pay-to-script-hash (P2SH) with MERKLE-BRANCH-VERIFY, and “Tail Call Execution Semantics”, have also been proposed to support private smart contracts.
Is the Bitcoin Revolution Legit?
The Bitcoin Revolution is still in its early stages, but it has already shown great promise as a decentralized digital currency that allows users to transact without the need for intermediaries. While there are some concerns about its anonymity features potentially enabling criminal activity, the benefits of Bitcoin seem to outweigh the risks at this point.
Only time will tell if the Bitcoin Revolution is truly legit, but it certainly has the potential to revolutionize the way we interact financially.