Why is Bitcoin encrypted (Why is Bitcoin covert)?

08/17/2023 10:45 • AI Insights • 66 views

Why is Bitcoin encrypted? Editor’s note: This article is from Orange Book (ID: chengpishu), authored by orangefans, and authorized by Planet Daily for publication.

Why is Bitcoin encrypted? What is it?

According to the definition, Bitcoin is a computable virtual currency. It is something that cannot be counterfeited or tampered with, and can be traced and verified. Its value is determined by a random number composed of a string of digits. In the blockchain network, these tokens are mined through hash algorithms. If we use something as a tokenized item for exchanging goods and services, like gold or silver, then this “currency inflation” can be understood as a way of keeping accounts in a unit. Because anyone can confirm and generate a block through a computer system to obtain ownership of this transaction. However, it should be noted that each transaction generates new assets and records them in a distributed ledger. In other words, all participants have their own accounts, and everyone can use their private keys to complete the payment. They not only hold assets such as Bitcoin, but also obtain all their BTC as rewards from another source. Then the question arises, what is the use of Bitcoin? In fact, it’s very simple, just link the wallet to Bitcoin, just like sending an email conveniently; but if you want others to see your password, it’s better to open the official Bitcoin forum:

https://www.binance.org/cn/news post

I think the first thing to clarify is that you need to have some understanding of cryptographic principles, and then look at the working principles and application scenarios of Bitcoin. There are two reasons for the development of Bitcoin now:

1. Bitcoin is a peer-to-peer network system;

2. Bitcoin has anonymity characteristics. Although most governments in most countries are actively regulating the digital currency field, they are lagging behind in technology. Therefore, the US Congress has taken measures to legalize it. However, the current situation does not seem to be the case. For example, the Biden administration has also approved the Bitcoin Law Amendment proposal, hoping to increase its impact on the circulation of the US dollar. (Image source: https://btcmanager.com)

Why is Bitcoin covert?

According to CCN’s report, Bitcoin is a privacy currency. Why is Bitcoin so important? Because it is anonymous. And Bitcoin is also used as a medium of exchange and a value storage method in the encryption field.

Since most digital currencies are sent to the network through electronic devices on smartphones or laptops. These computers can easily transfer data to external users, so it is not as vulnerable to attacks or interference as other blockchain protocols. However, despite the high degree of decentralization of Bitcoin, it is still a very important market. The reason why Bitcoin has anonymity is because its working principle is somewhat different from the traditional Internet. When we communicate using a mobile phone (usually in the form of a telegram), it means that anyone can view their wallet and forward it to a third party; if a friend tells them their password, they already own their encrypted assets, then they will get some news.

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Why is Bitcoin encrypted (Why is Bitcoin covert)?

Why is Bitcoin covert?

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