Bitcoin is the first of the crypto currencies that do not have a physical equivalent. Crypto coins can also be classified as digital money. Bitcoin is also the most popular of cryptocurrencies, the most traded and the one with the largest monetary volume. Bitcoin is based on mathematics, and people from all over the world can generate bitcoin using a mathematical formula through software programs.
Bitcoin History and Satoshi Nakamoto
Mortgage crisis was declared on September 28, 2008, with the great recession in the USA in late 2007. About a month later, an article titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was published under the name of Satoshi Nakamoto. This article gives information about the system’s infrastructure and Bitcoin. The system described in the article explains that it is a transparent, secure, person-to-person transaction, decentralized and controlled by the people involved.
The system proposed by Satoshi Nakamoto has attracted the attention of many people who are interested in cryptology, and with the support of a few people, it announced the first source code of Bitcoin on January 3, 2009 with 30,000 lines of code. Game console developer Hal Finney was the first to help Satoshi Nakamoto with code. More supporters were joining the system as Finney and other developers were gradually getting the system up and running.
Who is Hal Finney?
Apart from Satoshi Nakamoto, he is the developer who made the earliest bitcoin-related developments. Hal Finney is the first person to contact Satoshi Nakamoto and receive the first bitcoin transfer from him.
He passed away in 2014 due to Als disease; however, by his will, his body is kept frozen by the Alcor Life Extension Foundation with the possibility of being reawakened in the future.
What is Satoshi?
The name Satoshi is also used as a bitcoin currency. The smallest divisible unit of bitcoin is called satoshi. It is worth 1 Satoshi = 0.00000001 BTC.
What is Blockchain ?
It is a simple database that contains Bitcoin transfer transactions in a transparent, sequential and public manner. It can also be viewed as a global ledger. Since the blockchain was mentioned in Satoshi Nakamoto’s article in 2009, all bitcoin transfer transactions are stored on the blockchain. In other words, all transactions in the past have been processed on the blockchain and will be processed in all future transactions. The reassuring feature of blockchain is that historical transaction records cannot be changed. In this respect, there are studies on the use of blockchain in many different sectors of the economy.
What Are The Advantages Of Bitcoin?
High Mobility; Bitcoin can be sent anywhere in the world, so it provides a lot of convenience in cross-border value transfer. As the markets and stores that accept Bitcoin increase, ease of payment is provided.
Decentralized Structure; Any third party organization or uncertain powers cannot change or manipulate the bitcoin protocol. The Bitcoin network is protected by cryptographic methods. In addition, there is a consensus system for the realization of transactions. Thus, it is revealed that bitcoin forms a neutral structure.
Low Transaction Cost; Bitcoin payments are made at no additional cost, other than the transfer cost of the blockchain network. It has a more affordable cost than any existing online payment system.
Constant Supply; The amount of Bitcoin is fixed at 21 million, preventing the emergence of shock supplies that will affect the price. Thus, a policy preventing inflation was followed and various manipulative attempts were prevented.
Being Open Source; All transactions on the Bitcoin Blockchain are readily accessible to those who wish. Bitcoin transactions are irreversible, thus protecting against malicious attempts in merchandising transactions. No credentials need to be shared when making Bitcoin payments. Thus, protection against identity theft is provided.
What are the disadvantages of Bitcoin?
High Volatility; The fact that the bitcoin price is too volatile and very volatile can be seen as an obstacle to its development and widespread use. While the monthly volatility value of gold prices is around 1%, bitcoin volatility value can see 10%. Since sudden declines and spikes increase buy / sell risks, it is not suitable for the risk appetite of most investors.
Little Awareness; Bitcoin is less well-known than traditional financial instruments such as money, commodities, and securities. The fact that it is known by very few people around the world results in low usage rates.
Legal Uncertainty; Due to the fact that Bitcoin and cryptocurrencies are very new financial assets, government agencies have not yet made the necessary legal regulations. Lack of legal regulation can cause them to be perceived as illegal entities; However, the fact that an asset is not defined on the law yet does not mean that it is illegal. Public institutions continue to investigate to complete the necessary legal process.
How Is Bitcoin Taxed? Is Bitcoin Legal?
First of all, crypto coins cannot be defined as “money“; because;
1. Not published by States.
2. It was not accepted by society as money
3. According to legal regulations, it is not possible to say money.
In the current Income Tax Law, since there is no definition-regulation regarding cryptocurrencies, it is not defined how the income obtained as a result of buying and selling transactions in crypto money exchanges will be subject to tax. In order to clarify this issue, first of all, the Ministry of Finance should include cryptocurrencies in definitions such as commodities, money, real goods, securities or payment instruments in the Income Tax Law. However, the form of taxation will become clear after the definition to be made.
Crypto money transactions need to be regulated in financial and tax terms. In order to do this, first of all, this activity will need an economic definition. Due to the principle that taxes can only be regulated by law, the legal regulations that will turn them into an advantage by taking the developments in crypto money technology into consideration should be made without delay.
Apart from this, the commission tax of every transaction made by users in crypto money exchanges is paid by the exchange.
What is the Total Number of Bitcoins?
A total of 21 million bitcoins will be produced. The total number of bitcoins produced in 2020 is approximately 18 million. Since the difficulty level will increase and bitcoin production will be halved with halving, 21 million bitcoins will only be produced in 2140.
Is There Physical Bitcoin?
Bitcoin and most other cryptocurrencies are digital and have no physical counterparts. There are also cryptocurrency types such as USDT – USDC, whose value is classified as stable cryptocurrency, whose value is intended to be equal to a fiat currency, the equivalent of each unit is held in the bank.
Ways to Buy or Earn Bitcoin
A lot of false information is shared on the internet with the promise of earning bitcoins. Except for the incentives carried out by corporate companies, methods of earning bitcoin for free should not be respected. The competition in the market determines when the Bitcoin virtual currency will rise and fall. So don’t be fooled by what anyone says.