It’s no secret that Dennis Loos grew up in Bad Homburg vor der Höhe. After high school, I pursued my career as a financial analyst after becoming interested in the finance industry. Finance investment is known to be very volatile and risky, so I had to take my time to learn the in and out of making financial decisions and analyses.
In 2014, a friend introduced me to bitcoin, marking my first interaction with cryptocurrencies. Today, I own a crypto consulting company in Dubai, where I work as a senior consulting officer. I can teach and assist others in crypto investment and trading. I’m often seen standing on small and large podiums, imparting knowledge to crowds of thousands of people.
Table of Contents
What Is Bitcoin?
The definition of bitcoin is one of the most simple or, let me say, basic questions in cryptocurrency. Bitcoin is a variant of digital currency that you can buy, sell or exchange between two parties on the internet with high security. As an intangible asset, bitcoin can only be traded electronically, and it stores values, appreciates, or depreciates, just like gold, diamond, and securities.
Dennis Loos, Who Created Bitcoin?
Bitcoin was introduced anonymously through a whitepaper in 2008. However, it is said that Satoshi Nakamoto created bitcoin, which was released as open-source software and was the first successful virtual currency built with trust.
Tell Us About Crypto Mining
As we all know, bitcoin mining is one of the core concepts of bitcoin. There are specific groups of individuals known as miners responsible for mining bitcoin. The process of mining bitcoin involves using specialized computers with unique hardware capable of solving complex algorithmic equations.
Bitcoin miners mine bitcoin by solving a computational problem and creating a chain of connected transaction blocks. These specialized computers assist in authenticating transaction blocks within the bitcoin network. The miners earn a reward for adding a new block to the blockchain in the form of bitcoin and transaction fees.
What is a Bitcoin Wallet?
A bitcoin wallet is simply a digital wallet (storage) that allows you to store bitcoins. Technically, it is a software program that stores a secret number for each bitcoin address. Additionally, the wallet owners could send, receive and exchange bitcoins utilizing the bitcoin wallet. There are different forms: desktop wallet, hardware wallet, mobile wallet, and web wallet.
What Does a Bitcoin Address Mean?
A unique identifier consisting of almost 26 to 35 alphanumeric characters is a bitcoin address. The identifier often begins with the digit 1 or 3, and it identifies the location where the bitcoin has to be sent. As a bitcoin user, you can generate a bitcoin address without any additional payment since the bitcoin address is temporary and changes for each new transaction. Today, you can find three common address formats as the standard.
Who Governs Bitcoin?
The governance of bitcoin is decentralized. Kindly note that any organization does not manage bitcoin, thereby excluding it from governance limits. It is a simple decentralized digital money. It is issued and managed without the involvement of any centralized authorities. The major key players are miners who are only there to verify and generate new bitcoins with their specialized advanced computers while maintaining the security of the bitcoin network.
What Causes the Fluctuating Price of Bitcoin
You should be aware that there are limited numbers of bitcoin in circulation. This makes bitcoin very volatile as the creation of new bitcoins slows down. The demand for bitcoin follows the level of inflation to maintain price stability. Moreover, bitcoin is comparatively smaller in comparison to other industries; therefore, the market price of bitcoin could move up or down without even a significant amount of cash flow.
Can You Trust Bitcoin?
I see no reason to showcase your trust in bitcoin. The trust factor in bitcoin relies on the human ability to trust numbers, mathematical algorithms, and encryption. All participants are involved in the governance of bitcoin as it is system-operated. The characteristics of being decentralized and technically free with open source code and peer-to-peer technology should increase your ability to trust bitcoin.
With Bitcoin, Can You Double-Spend?
One of the major objectives of the creation of bitcoin is to address double-spending as we know that double-spending refers to the instance where users attempt to use the same bitcoin twice. Well, this is impossible. There is a set limit of bitcoin in circulation- 21 million bitcoins. Additionally, every existing bitcoin has unique traits which offer legitimacy to the transactions. This stops users from duplicating transactions, as any user attempting to duplicate a transaction would receive a notification about the transaction’s legitimacy.
Dennis Loos, What Is a Public Key?
Every bitcoin address has both a private and public key. The public key gives others the access to send bitcoin to your address and verifies the transaction’s signature to ensure things are in order and it finalizes the transaction.
What Then Is a Private Key?
A private key allows you to access or unlock your bitcoin and spend it. It does this by authorizing transactions, which signifies to the bitcoin network that you are the real owner of the address in which the bitcoin is held and that the transaction is valid. Only those with the private key can spend the bitcoin, so it is good to note that the private key serves as the safeguarding access to your bitcoin.
I can give you countless reasons to trade your bitcoin for fiat and other digital tokens without an exchange. One key reason would be security and trust. There were instances where bitcoin exchanging companies have suffered catastrophic hacks in the past and lost hundreds of their users’ bitcoin. So to avoid suffering when exchanges are hacked, it is better to avoid them. Another thing to consider is privacy. Exchangers nowadays have similar know-your-customer (KYC) requirements to banks. This information is kept on file and is at risk of theft if the exchange’s security is not up to scratch.
Dennis Loos, What Are the Benefits of Bitcoin?
One important benefit of bitcoin is payment flexibility, lower transaction fees, and reduced risks for merchants. Also, bitcoin offers you the advantages of improved security and control while ensuring improved transparency. And, of course, decentralization ensures that bitcoin is free from the control of any organization or individual, thereby ensuring that it is verifiably neutral.
Lastly, Dennis Loos, What Are the Setbacks in Bitcoin?
I would say that the highly volatile nature of bitcoin is the major setback of the blockchain alongside the limited extent of acceptance, which of course, is getting better.
