One ofthe key advantages or the Bitcoin cryptocurrencyis a complete decentralization. Unlike banks and e-payment systems, there is nocentral authority that would manage all payments and control everything. Tomake a payment, all you need is a client program (usually an online wallet) anda decentralized ledger/network where all the transactions are stored. Thisnetwork is called Blockchain.
When auser performs a transaction, for example sends money to another user or anonline store, a new data block is created in the Blockchain where informationabout this transaction is logged. In fact, a bitcoin is simply a Blockchainentry and nothing more. It’s important that all the data is stored in an openand unencrypted form with all Bitcoin addresses of the users, but without anypersonal information.
In otherwords, it’s possible to know the exact incoming and outcomingBitcoin addresses ofany transaction, but you can’t know who their owners are. The ledger also hasno information about how many bitcoins any user owns. Such a unique systemallows transparency and verifiability of all payments without revealing users’personal data.
Manypeople seek for the Bitcoin rate,and this rate is closely connected with the number of transactions being done.The more transactions, the more people use Bitcoin for buying and transferringmoney, the higher the rate, and vice versa. But there are other factors thataffect the rate too. As of December 2015, the Bitcoin/USD rate was 1:450.