CRYPTOCURRENCY, BLOCKCHAIN, AND BITCOIN

Abstract

Cryptocurrencies are digital (virtual) currencies, which, although they are a means of payment, are not yet strictly regulated by law in most states, and in some, they are even prohibited. Many people, including IT professionals and programmers, do not know much about this topic, and the general public equates the terms blockade and bitcoin. The crypto-market today amounts to nearly $ 770 billion. Since the emergence of the first digital currencies to date, over 1,300 active crypto sites have appeared, which differ in their properties and uses. Before the bitcoin, there were a lot of unsuccessful attempts to create digital currencies (DigiCash, Hashcash, Facebook credit, etc.). Utopian idea that mathematics and physics can solve social problems began its life through the appearance of bitcoin. The genial idea on which is a bitcoin functioned is based on blockchain technology, whose potential reaches far beyond the cryptocurrencies. Although there is still a controversy over the pseudonyms of Satoshi Nakamoto, his legacy has the potential to change the world. The success of bitcoin is in the advantages it has in relation to other similar currencies, but its importance goes beyond the benefits it has made. The banks do not need to store the data on money, property records and every bit of transaction stored by computers of all network users in a common database - blockchain. All transactions are much faster than banking, no tax, with drastically easier payment across state borders. Bitcoin provides to users security without identification, although blockchain registers a transaction, does not record who is behind it. The paper presents the basic principles on which bitcoin and other cryptocurrencies are based, the relationship between blockchain and bitcoin is explained.