Wednesday, 30 July 2014

We Use Coins: What is Bitcoin???


Bitcoin is a new kind of money and an innovative payment network that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Bitcoin is an open-source software, anyone can take part in it, its design is public nobody owns or controls Bitcoin. Bitcoin uses peer-to-peer technology to operate with no central authority or banks. Managing transactions and issuing of Bitcoins is carried out collectively by the network. There are no transaction fees and no need to give your real name.

As a new user, you can get started with Bitcoin without understanding the technical details. Once you have installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose your addresses to your friends so that they can pay you or vice versa. In fact, this is pretty similar to how email works, except that Bitcoin addresses should only be used once.  Unlike bank accounts, Bitcoin wallets are not insured by the FDIC.

Though each Bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed only their wallet IDs are revealed. While that keeps Bitcoin users transactions private, it also lets them buy or sell anything without easily tracing it back to them. That’s why it has become the currency of choice for people online buying drugs or other illicit activities.

Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because Bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy Bitcoins as an investment, hoping that they’ll go up in value.

Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once.

The price of a bitcoin can unpredictably increase or decrease over a short period of time due to its young economy, novel nature, and sometimes illiquid markets. Consequently, keeping your savings with Bitcoin is not recommended at this point. Bitcoin should be seen like a high risk asset, and you should never store money that you cannot afford to lose with Bitcoin. If you receive payments with Bitcoin, many service providers can convert them to your local currency.

1 comment:

  1. The blog was absolutely fantastic! Lot of great information which can be helpful in some or the other way. Keep updating the blog, looking forward for more contents...Great job, keep it up..
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