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It's being called a better-than-gold equivalent store of value and a medium of exchange to rival Visa, Mastercard and Paypal. Its unit of account and predetermined characteristics of a finite supply (21 Million total bitcoin in circulation to avoid inflation) make bitcoin a trustless, permissionless and (will be) frictionless new world currency.
It's the programmable money paradigm which requires no third party intermediaries or centralized governance for all users to agree and accept terms of using it jointly. .
Bitcoin is a technology its electronic money backed by blockchain DLT a robust international network of payments and transactional/mercantile exchanges which are completely decentralized and relies on community consensus voting mechanism for its longest/honest chain. It doesnt depend on banks or governments to operate and its creator Satoshi Nakamoto is a set of ghosts.
Bitcoin breathed new life into trying times amidst real estate housing bubble and fractional lending credit debacle and came into existence in October 2008 following the publication of a whitepaper titled, Bitcoin: A Peer To Peer Electronic Money System (made by the author under the name of Satoshi Nakamoto).
Satoshi combined the knowledge of prior digital currency developments (see the Nakamoto Institute) such as HashCash and B Money and finally got all the pieces to the puzzle to fit. It had been the first to succeed where others neglected to engineer a practical, autonomous decentralized peer to peer cryptocurrency that requires no central authority for money emission, validation of transactions or settlements. .
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The main innovation in Satoshis Bitcoin invention is the development of a distributed computational hashing system known as the proof-of-work algorithm. It conducts global transaction validations every 10 minutes, allowing the decentralized network technology to come to consensus agreement regarding the condition of each transaction and if the funds are valid and should be confirmed for being locked into the next block created. .
The invention of Bitcoin represents the pinnacle of years of research in distributed systems and cryptography, its own development combines 4 Important innovations that make the existence of Bitcoin potential:
There's much more to learn about the inner workings of this blockchain and the way it works, but right now we'll do our very best to develop bite-sized pieces of digestible digital currency content just like the way to buy it, trade it, invest it, save it, send it, spend it, receive it and even earn it. .
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Building the exchange software in-house: Collect a committed team of developers (friends, freelancers) to construct (and maintain) your exchange program. Ensure they understand how an exchange works in general, how cryptocurrency and blockchain technology works, and that they implement the above-mentioned components.
From a programming language point of view, the choice of the proper language might also vary depending on which cryptocurrency you want to implement to your exchange (check out this post). Moreover, make sure your software is compatible with various payment processing systems or banks to safeguard payment transactions within your exchange. .
Most importantly (this really is a no-brainer, however a few people seem to have unrealistic expectations), you need to estimate the costs and time associated with developing, maintaining, and constantly upgrading the software in-house. Due to the inherent complex nature, developing an exchange program from scratch will be quite costly and might take up 1-2 years (depending on your own developers experiences) until it works properly.
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Keep in mind though, these numbers are only a rough estimation based on our experience since so many different factors index need to be considered. .
Using free/open source scripts: If you check out GitHub or other forums, you will discover quite a few open-source bitcoin exchange scripts. The big benefit obviously is the source code is free. Nevertheless, there are also a few dangers that must be considered:
You still need someone with technical knowledge to Continue understand and implement the lines of code within the open-source script. Becoming acquainted with how the script functions, will take some time and modifications to enable customization, will also require additional time and money.
There's no guarantee that the script is both protected and reliable. It might be buggy, susceptible to hack efforts or in the worst instance, includes malicious lines of code, which gradually but unnoticeably extract your funds or bitcoins.
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The amount of development service on an open source system is quite sparse. The majority of the time, your group of developers will probably be left on their own to figure out how to fix bugs or improve performance. Worst you can try these out case, when the project is abandoned, you'll be left with no support or whatsoever. .