Bitcoin is a digital currency created in 2009 that is designed and held electronically. No banks, individuals or other middlemen control the currency and and its transactions. It was proposed as an electronic payment system by a software developer named Satoshi Nakamoto.
It doesn’t require to give the real name of a person and involves no transaction fees. It is growing rapidly and being accepted by more and more merchants and services. Bitcoins is not a printed currency, rather it is produced on computers by people throughout the world. Bitcoins are produced using software that solves mathematical problems.
One can use Bitcoin to buy things electronically just like like any other conventional currency. It’s also becoming popular for trading as a currency as well as for use on gambling sites. Bitcoin is decentralized which makes it differ from the regular currencies. It implies that the bitcoin network is not controlled by a single institution. As no bank or other power can control one’s money with Bitcoin, a lot of people find it easy and convenient.
Bitcoin is quite simple and easy to set up. It doesn’t require any payable fees, doesn’t ask any questions and lets the user set up a bitcoin address in seconds. Bitcoin is anonymous and a single user can hold more than one bitcoin addresses and it doesn’t link them with names, addresses, or any other personal information.
It is quite a speedy service as it lets the user send money anywhere and the money arrives within minutes as soon as the payment is processed by the bitcoin network. Bitcoins are non-repudiable and can’t be received back once they are sent, unless they are returned by the recipient.
The details of every transaction are stored by bitcoin in a block chain that is a huge digital ledger. One can tell the number of Bitcoins stored at a particular bitcoin address. The user can choose not to use the same bitcoin addresses consistently. Also, they can make sure not to transfer large number of Bitcoins to a single address.
Basis Of Bitcoins
Bitcoin is based on mathematics. People use software programs globally following a mathematical formula to create Bitcoins. The formula is freely available for everyone and the software is open source.
One can buy bitcoins on an Exchange. There are a number of marketplaces, bitcoin exchanges, that let people buy or sell bitcoins in exchange of different currencies.
Bitcoins can also be transferred from one person to another with the help of mobile apps or computers just like transferring cash digitally.
Bitcoins are created by mining. People can compete in mining bitcoins by solving complex math puzzles using computers. Every ten minutes, one winner is rewarded with 25 bitcoins. According to the rules of the Bitcoin system, a total of 21 million bitcoins can ever be produced by miners but this number can be divided into parts.
A digital wallet stores the bitcoins that is just like a virtual bank account allowing the users to send or receive bitcoins, save money as well as pay for things. The wallet can be either in the computer of a user or in the cloud.