Cryptocurrency: Why Hacker’s Use Bitcoin?
Greeting and welcome to Cyber Breacher, Today we learn about cryptocurrency and bitcoin. Why hackers prefer bitcoin and other cryptocurrencies like Monero, Etherium, Zcash, Dash, Verge? And I will teach everything about cryptocurrency.
What is Cryptocurrency?
Before we learn about cryptocurrency, we first need to understand what currency is and how it works?
So Currency in simple word is a medium of exchange, and currency holds a value, and today we use paper currency like the dollar, pound, Rupees as a medium of exchange. We buy goods in exchange for a piece of paper. So the only reason paper currency works is that we believe that it has a holding value, and it will be accepted by others. When this whole process is done via digital form then it is called digital currency. Digital Currency is Centralized which means every transaction done is present in a central institution like a bank, and the collection of transactions is called a ledger. Now you have a working knowledge of digital currency. So what makes cryptocurrency different? Well, cryptocurrency is a virtual currency that uses cryptography which makes it very secure and makes it nearly impossible to counterfeit or double-spend. Cryptography is the science of protecting information by transforming it into a secure format. Cryptocurrencies use 'decentralized control' which means that they are not controlled by one person or government. So what’s the problem with a centralized intermediary? Well, a lot of problem like a single point of failure can be a risk factor for an organization, they can charge as much processing fee as they want for a transaction, and they work according to government guidelines. Ok, now you know everything about cryptocurrency let’s talk about bitcoin.
What Is Bitcoin?
Bitcoin is a decentralized cryptocurrency created in 2008 by Satoshi Nakamoto. The bitcoin was implemented in 2009 when an open-source software was released. Bitcoin can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Right now Bitcoin is the most used cryptocurrency on the earth, and only 21 million Bitcoin can be mined or created and the estimated amount of bitcoin in circulation is 18 million BTC. The Smallest unit of Bitcoin is Satoshi. Bitcoin has been criticized for its use in illegal transactions, the large amount of electricity used by miners, price volatility, and thefts from exchanges.
How Does Bitcoin Works?
First, you need to know about Blockchain. Blockchain is a public ledger that records bitcoin transactions. A ledger is a file that stores transactions. The Blockchain is maintained by a network of communicating nodes running bitcoin software.
We will understand the working of bitcoin with an example, bob has two bitcoin, and he sends two bitcoin to mark, This transaction is validated via the random network nodes running the bitcoin software. The network nodes can validate transactions, add them to their copy of the ledger, and then broadcast these ledger additions to other nodes. To achieve independent verification of the chain of ownership each network node stores its copy of the blockchain. At varying intervals of time-averaging to every 10 minutes, a new group of accepted transactions called a block is created, added to the blockchain, and quickly published to all nodes, without requiring central oversight. This allows bitcoin software to determine when a particular bitcoin was spent, which is needed to prevent double-spending. a double-spend attack means when the same digital currency is spent more than one time.
How Is Bitcoin Mined?
Bitcoin mining is a process by which new bitcoins are entered into circulation, and Bitcoin miners receive Bitcoin as a reward for completing "blocks" of verified transactions which are added to the blockchain. Mining rewards are paid to the miner who discovers a solution to a complex hashing puzzle first, hashing is a mathematical process that converts strings into a hexadecimal value with the computer CPU and GPU. The probability that a participant will be the one to discover the solution is related to the portion of the total mining power on the network. You need either a GPU (graphics processing unit) or an application-specific integrated circuit (ASIC) to set up a mining rig. a mining rig is a computer system used for mining bitcoin. Now you know how bitcoin is mined, let's get you a bitcoin wallet.
How To Get A Bitcoin Wallet?
Let’s Create a Bitcoin wallet, you can follow this guide with your phone or desktop. open your favorite browser, and let’s begin.
- The first step is to go to blockchain.com and click on sign up.
- Enter Your Email Address And Password. (Use A Strong Password)
- Once You Click On Create A Account It Will Ask You To Verify.
- Open your email inbox and click on verify.
- Go back to the tab and Voila your cryptocurrency wallet has been created.
Click On receive to see your wallet address.
Why Hackers Use Bitcoin?
Now the big question why hackers use bitcoin? Why can't they use PayPal or any other UPI services? One of the key reasons behind the usage of bitcoin is that it's partially anonymous. a partially anonymous means bitcoin transaction is stored in a public ledger which means everyone can see the transaction but it's not possible to see who was behind the transaction the only thing we see is the wallet address, and converting your money to bitcoin, sending, and receiving it doesn't even require the use of a legal name or address. due to its decentralized nature, it's not possible to delist anyone's bitcoin address. Tracking bitcoin is a complex, 21st-century cat-and-mouse game. Because the hackers know their movements can be traced, they typically move their illegal gains across hundreds, or even thousands, of transactions. They might control dozens of other wallets and move the money back and forth.
Monero is the same as bitcoin but it's untraceable and that's why it's mostly used for illegal activity. I will make a separate video on Monero.
Video On Cryptocurrency:
https://youtu.be/sxwSHnI-VuM
