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https://github.com/rohitscript/simplifyingblockchainconcepts

Simplifying Blockchain Concepts in 7 points only
https://github.com/rohitscript/simplifyingblockchainconcepts

bitcoin blockchain blockchain-technology ethereum nft smart-contracts web3

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Simplifying Blockchain Concepts in 7 points only

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# Simplifying Blockchain Concepts in 7 Simple Points.



| No. | Topics                                                                            |

| --- | -------------------------------------------------------------------------------------------- |

| 01  | [What is Blockchain Techonology?](#what-is-blockchain-technology)                                                   |

| 02  | [What is Bitcoin?](#what-is-bitcoin)                                                   |

| 03  | [What is Wrapped Bitcoin?](#what-is-wrapped-bitcoin)                                                   |

| 04  | [What is Ethereum ?](#what-is-ethereum)                                                   |



## What is Blockchain Technology

## What is Bitcoin

1. **Definition:** Bitcoin is a decentralized digital currency that enables peer-to-peer transactions without the need for a central authority or intermediary.



2. **Blockchain:** Bitcoin transactions are recorded on a public ledger called the blockchain, which is a decentralized database maintained by a network of computers around the world.



3. **Cryptography:** Transactions on the Bitcoin network are secured through cryptography, using complex mathematical algorithms to ensure that they are secure and tamper-proof.



4. **Mining:** New Bitcoins are created through a process called mining, where powerful computers compete to solve complex mathematical problems. This process validates transactions and adds new blocks to the blockchain.



5. **Limited Supply:** There is a finite supply of Bitcoin, with a total of 21 million Bitcoins that will ever be created. This makes it a deflationary currency, meaning its value could increase over time as demand for it grows.



6. **Decentralization:** Bitcoin is decentralized, meaning that it is not controlled by any government, institution, or company. This makes it more resistant to censorship and ensures that no one entity can manipulate its value or control the network.



7. **Wallets**: Bitcoin is stored in digital wallets, which are software programs that allow users to send, receive, and store Bitcoin. There are different types of wallets, including software wallets, hardware wallets, and paper wallets.



**Overall**, Bitcoin is a revolutionary digital currency that enables fast, secure, and low-cost transactions without the need for intermediaries. Its decentralized nature and limited supply make it a unique asset class that is increasingly being recognized by investors and financial institutions



## What is Wrapped Bitcoin

1. **Definition:** Wrapped Bitcoin (WBTC) is a tokenized version of Bitcoin that is backed 1:1 by Bitcoin and can be used on the Ethereum blockchain.

2. **Purpose**: The purpose of WBTC is to enable Bitcoin to be used in decentralized applications (dApps) on the Ethereum network, which is a popular platform for building decentralized finance (DeFi) applications.

3. **Tokenization**: WBTC is created by depositing Bitcoin with a custodian, who then issues WBTC tokens on the Ethereum blockchain. The custodian holds the Bitcoin in reserve and ensures that each WBTC token is always backed by an equivalent amount of Bitcoin.

4. **Benefits**: WBTC offers several benefits for users, including faster transaction times, lower fees, and the ability to earn interest or participate in DeFi applications using Bitcoin.

5. **Decentralization**: While WBTC is centralized in the sense that it relies on a custodian to hold the Bitcoin reserves, it is also decentralized in that anyone can use WBTC on the Ethereum network without needing permission or approval from a central authority.

6. **Availability**: WBTC is available on a number of decentralized exchanges (DEXs) and can be traded for other cryptocurrencies or fiat currencies. It can also be used as collateral for borrowing and lending in DeFi applications.

7. **Risks**: While WBTC offers benefits for users, it also carries risks, including the possibility of custodial theft, the potential for price fluctuations due to market volatility, and the risk of smart contract bugs or other technical issues.



**Overall**, WBTC is a tokenized version of Bitcoin that enables Bitcoin to be used on the Ethereum network, providing users with faster transaction times, lower fees, and the ability to participate in DeFi applications using Bitcoin. While it offers benefits for users, it also carries risks that should be carefully considered before investing or using WBTC.