Definition: Basically, “Bitcoins” is a cryptosystem, a type of digital cash. It’s a decentralized, peer-to Peer digital cash system without a central bank and is transmitted from user to user via the peer to peer bitcoin ledger network without the need for third-party intermediaries. In other words, you have a digital “backed” currency. The most commonly referred to example are the coins that you may have seen in electronic stores.
Most people are familiar with the main two (or more than two) bitcoin forks: Litecoin and Dash. But what is the lesser known coin? Let’s take a look at what’s available out there.
Do you remember the bitUSD? That was the “bitstamp” which was the only bitcoind transaction made at the time that was actually legal. The thing is, when the government decided to “legally” make bitUSD a currency, they actually did so by creating a new class of currencies that are actually allowed in commerce – this includes Litecoin. Nakamoto was thinking along the same lines when he launched the bitcoin project, along with Vitalik Buterin, after all. Nakamoto’s and Buterin’s idea was to create a way to have a digital form of currency that could be traded online – a way that wasn’t subject to the politics of any country or political structure.
So, what was the resulting product? Well, it was supposed to be an easy-to-use, secure and cheap way to transfer funds from one party to another. Nakamoto and Buterin also knew that they needed something that had the functionality of a traditional online merchant account (like PayPal) but could also act as a digital currency for everyday use. They needed a business model, and they needed a way for people to start using it. This is where the idea of a “digital wallet app” came into play. With a digital wallet app anyone can use their credit card, their PayPal account, etc, but they can also use their own money to transfer funds from their computer to theirs.
Now, the great thing about the digital currency system that Nakamoto came up with is that it solves a whole bunch of problems for users that were traditionally associated with having money transfers handled on a server. For example, one of the problems with having a traditional server-based money transfer system is that people have to trust that their servers aren’t going to go offline. This can pose huge risks to both the sender of the funds as well as the recipient of the funds, since if the server goes down, so does everything else on your computer, including your entire network of computers. With peer-to Peer bitcoin Blockchain technology there’s no need for you to worry about that at all.
The next major problem with traditional server-based systems is that they tend to be slow. Transactions can take up to a week to go through, which can be incredibly slow for many people who use the internet to do business. With the bitcoin forks the transactions are fast. It takes less than a day for someone to transfer some money from their home computer into theirs using the bitcoin cash platform.
Since most transactions are fast, this is great news for people who make their living mining for bitcoins. There is also less downtime for these miners, so they can continue making millions of dollars off of the back-room activities of the network. For these people, this is good news. But there are other types of people out there who don’t mine for bitcoins but still want to use the system, and they’re the ones who will be helped the most by the bitcoin forks.
Some developers are working on a way for the average user to be able to access their newly-found money in real-time. This means that there will be less downtime for these miners, and it will be easier for them to make the profits that they need to keep going. In the short run, this means that fewer total dollars will change hands on the back-room transactions for the bitcoins. However, in the long run it will mean a healthier market for everyone, because more money will come into circulation when the average person can instantly access the new bitcoins instead of having to wait for weeks for an international wire to go through first.
