Bitcoin is a cryptocurrency based on a decentralized network that allows users to make peer-to-peer transactions, avoiding the traditional centralized entity managing the funds exchange. Transactions are recorded and verified by the network itself, using a public distributed ledger or blockchain.
Bitcoin is divisible into the smallest unit of one hundred-millionth of a coin (0.00000001 BTC). This unit is called satoshi. Bitcoin algorithm also establishes a maximum number of 21 million BTC (still being generated or mined at a decreasing rate). This limited supply makes it an attractive asset for investors.
Bitcoins are used - as any other currency - to pay for services and goods. One of the design advantages of bitcoin is its pseudo-anonymous nature. Despite every transaction is recorded and published in the blockchain under a unique identifier, the name of the trader is never made public. This fact makes that even if the system is not completely anonymous (but pseudonymous instead), is still very hard to trace back the identity of the buyer and seller.
Because bitcoin is not tied to any central entity, international payments are cheaper and easier than with traditional currencies. An increasing number of businesses are accepting bitcoin and other cryptocurrency payments, and bitcoin has also become a popular investment option.
As mentioned earlier, bitcoins can be transferred directly between users. In the recent years many bitcoin exchanges have also flourished globally. These cryptocurrency exchanges allow customers and investors to trade their bitcoins for traditional currencies or for other cryptocurrencies.
Cryptocurrency exchanges store a large quantity of bitcoins, and they are an attractive target for hackers. For that reason, cryptocurrency storage has become a key issue for bitcoin exchanges looking for the adequate protection of large amounts of cryptocurrency, and for its viability as a valid currency.
With that challenge in mind, CYBAVO has created a secure bitcoin storage and management solution for exchanges and other cryptocurrency traders. CYBAVO VAULT combines top-notch security technologies with the convenience required by cryptocurrency exchanges.
Learn more about blockchain and cryptocurrencies in our Knowledge Center.