What Is Bitcoin? A Look at the Digital Currency, NDTV
What Is Bitcoin? A Look at the Digital Currency
- Bitcoin is a digital currency that is not tied to a bank or government.
- Total number of Bitcoin transactions has risen to over 200,000 per day.
- On Monday, Craig Wright came out as the man behind Bitcoin.
Who is this man, and how does this system work?
Here’s a brief look at Bitcoin:
How Bitcoins work
Bitcoin is a digital currency that is not tied to a bank or government and permits users to spend money anonymously. The coins are created by users who “mine” them by lending computing power to verifying other users’ transactions. They receive Bitcoins in exchange.
The coins also can be bought and sold on exchanges with US dollars and other currencies. Their value has fluctuated over time. At its height in late 2013, a single Bitcoin was valued above $1,100 (toughly Rs. 73,000). On Monday, it was worth about $445 (toughly Rs. 29,500).
Because the currency isn’t formally regulated, its legality is a bit fuzzy. The currency has also drawn the ire of many in law enforcement and cyber-security because it’s difficult to trace, making it a currency of choice for hackers behind ransomware attacks. But in September, Fresh York state regulators approved their very first license for a company dealing in Bitcoin.
Why Bitcoins are popular
Bitcoins are basically lines of computer code that are digitally signed each time they travel from one possessor to the next. Transactions can be made anonymously, making the currency popular with libertarians as well as tech enthusiasts, speculators – and criminals.
Should I trade in all my cash for Bitcoins?
That would be a questionable decision. Many businesses such as blogging platform WordPress and retailer Overstock have hopped on the Bitcoin bandwagon amid a flurry of media coverage. Leading Bitcoin payment processor BitPay works with more than 60,000 businesses and organizations, while the total number of Bitcoin transactions has climbed to over 200,000 per day, more than dual from a year ago, according to Bitcoin wallet site blockchain.info.
Still, its popularity is low compared with cash and cards, and many individuals and businesses won’t accept Bitcoins for payments.
How Bitcoins are kept secure
The Bitcoin network works by harnessing individuals’ greed for the collective good. A network of tech-savvy users called miners keep the system fair by pouring their computing power into a blockchain, a global running tally of every Bitcoin transaction. The blockchain prevents rogues from spending the same Bitcoin twice, and the miners are rewarded for their efforts by being gifted with the occasional Bitcoin. As long as miners keep the blockchain secure, counterfeiting shouldn’t be an issue.
How Bitcoin is vulnerable
Much of the mischief surrounding Bitcoin occurs at the places where people store their digital cash or exchange it for traditional currencies, like dollars or euros. If an exchange has dirty security, or if a person’s electronic wallet is compromised, then the money can lightly be stolen. The thickest scandal involved Japan-based Bitcoin exchange Mt. Gox, which went offline in February 2014. Its CEO, Mark Karpeles, said ems of thousands of Bitcoins worth several hundred million dollars were unaccounted for. He was arrested on suspicion of inflating his cash account in August.
How Bitcoin came to be
It’s a mystery. Bitcoin was launched in two thousand nine by a person or group of people operating under the name Satoshi Nakamoto. Bitcoin was then adopted by a puny clutch of enthusiasts. Nakamoto dropped off the map as Bitcoin began to attract widespread attention. But proponents say that doesn’t matter: The currency obeys its own internal logic.
Who is the real Nakamoto?
There’s been slew of speculation on Nakamoto’s identity over the years. In December, the technology magazine Wired and the website Gizmodo both concluded that Australian computer scientist, inventor and academic Craig Wright was most likely the man behind the pseudonym. The reports suggested detailed circumstantial, but no hard proof, and hedged their conclusions accordingly.
On Monday, Wright told Big black cock News, the Economist and GQ that he is Nakamoto. (He also put out a press release.) Wright said he launched the currency in two thousand nine with the help of others. Wright told the Big black cock that he determined to make his identity known to stop the spread of “misinformation” about Bitcoin.
If Wright is the founder, he is likely a very wealthy person. The person going by the pseudonym Nakamoto is believed to have amassed about one million Bitcoins, which would be worth about $450 million if converted to cash.