Bitcoin

The answer to the question "How many cryptocurrencies are there in the world?" changes every day, because new ones are added to such projects every day. As of December 2023, there are more than 23,000 cryptocurrencies around the world. However, among this wide diversity, Bitcoin has a special position; Because it was the first cryptocurrency, it made its name known to almost everyone. So, what is Bitcoin that everyone is familiar with and what does it actually do? Bitcoin is a product of Blockchain technology and aims to be a medium of exchange, storage and measurement, like the Euro or the Dollar. However, there is one difference: Neither the FED nor the ECB is behind Bitcoin; Its primary distinguishing feature is that it does not have any central authority behind it. Bitcoin derives its power and value from a peer-to-peer network and cryptography. If we ask what kind of network we are talking about, we see a world map like this.
Anyone in the world who is connected to the internet and wishes can install a client such as Bitcoin Core on their device and become a part (node) of the peer-to-peer network seen on the map. Moreover, more advanced users can also contribute to the development of this network. Many people may think that another distinguishing feature of Bitcoin is that it does not have a physical existence compared to the money we are used to. Yes, Bitcoin is a system based entirely on the consensus of ownership of a digital asset. But this is not as important a difference as it seems; Because the paper on which money is printed has never been something to which value is attributed. Therefore, it cannot be said that there is much difference in practice whether the money is paper (fiat money) or registered or digital (the concept of digital money is a broad umbrella that includes cryptocurrencies). “Money” is merely a measure, that is, information, of how much purchasing power the person who owns it currently has. The important point here is that the asset called "money" has certain characteristics, such as being accepted by everyone, portable, divisible, not too scarce or too abundant. It can be said that Bitcoin provides these features to a certain extent. However, there is another important issue for any asset to be money: It cannot be easily imitated or copied... This feature is provided by Bitcoin with the Blockchain technology on which it is based, and all Bitcoin transactions are recorded in an encrypted form in a public ledger as interconnected blocks, and copies of these blocks are made. It is kept on servers (nodes) distributed around the world. After the transactions that occur within a certain period of time are published in the distributed network called peer-to-peer, these transactions are collected by miners in a group called a block approximately every ten minutes. Miners then compete to find the desired output in the block hash. The person who makes the first solution announces it to the others and the new block is added to the chain. In this system, consensus is achieved through consensus on distributed transaction records based on cryptographic evidence, instead of a central circle of trust such as a bank. History of Bitcoin While the seismic waves of the 2008 global financial crisis caused a deep shock in all world economies; Cracks had also appeared in the solid domes of the traditional financial system. In such a period when trust in the system was eroding and doubts about old paradigms were at their peak, the world witnessed a bold step and a mysterious figure named Satoshi Nakamoto published a manifesto and, in a way, a prospectus of Bitcoin on October 31, 2008, which could shake the traditions of the financial system. : “Bitcoin: A Peer-to-Peer Electronic Cash System.” On January 3, 2009, Bitcoin's initial block (Genesis Block) met the digital world like a seed expected to germinate in the shadow of the same chaotic financial environment, and this date was recorded as the release date of Bitcoin. The transaction in the initial block also meant that the first Bitcoin entered circulation, as the Bitcoin protocol includes the incentive system. However, this first Bitcoin block had another interesting aspect. Satoshi Nakamoto added a message to the raw data of the first block, and this message pointedly included the headline of The Times newspaper of the same day: Chancellor on brink of second bailout for banks.
How to Use Bitcoin? Until today, you must have asked "How to buy Bitcoin?" A question must have been on your mind. More importantly, when you buy a Bitcoin, the question of how you will store and use it comes to your mind. First of all, to own Bitcoin, you either need to be a miner or open an account on a crypto exchange. Bitcoin mining was relatively easier in the times following Bitcoin's first release date, but now it is both more difficult and more costly... To become a Bitcoin miner, today you need to use a very powerful CPU (Graphics Processor) or a special integrated circuit (specially developed for this job). You need ASICs) devices. Alternatively, renting processing power from cloud mining services is also an option. On the other hand, buying and selling Bitcoin from the stock market is a very easy process. Although there are many differences in nature, there is no practical difference between buying and selling Bitcoin and buying and selling stocks on the stock market. You can resell the BTCs you purchased through crypto exchanges or use them as a means of payment during your travels to some countries. “How to store Bitcoin?” In response to the question, there are multiple alternative methods. The exchanges store the Bitcoins you buy from the exchange on your behalf; which is called hosting. There is no risk of losing keys or wallets when storing Bitcoin via hosting; However, any security weakness of the exchange you are trading on poses a risk here. Referring to this situation, “If the key is not yours, Bitcoin is not yours either.” There is a popular saying in the cryptocurrency world. Other alternatives for storing Bitcoin are to transfer your coins hosted on the exchange to hot wallets or cold wallets. Hot wallet refers to Bitcoin storage applications. Using hot wallets, that is, transferring and withdrawing money from the hot wallet to the stock exchange, is more practical than cold wallets. On the other hand, hot wallets are also connected to the internet and therefore are considered a little more risky than cold wallets. Cold wallets are physical or, more accurately, hardware storage tools. Since cold wallets are not connected to the internet, they are completely protected against any hacker attacks. The only risk of storing BTC in cold wallets is the loss of the wallet, that is, the hardware.