The Mystery Currency Called Bitcoin

May 31, 2018 40 views
Google+ Pinterest LinkedIn +

Recently, the world has become awestruck with a new currency called crypto currency. Crypto currencyis digital currency and there are many forms in which it is available such as Bitcoins, etc. It was created by a person named Satoshi Nakamoto in 2009 where the idea of crypto currency wasset out in a white paper. According to the paper such currencies promisedlower transaction fees than traditional online payment mechanisms.

The official Bitcoin Foundation clarified that the word "Bitcoin" can be used in two different senses. When capitalized, it shall mean the entity or concept, whereas when written in lower case, it shall mean quantity or units of the currency."Bitcoin" or "bitcoins" can be used to denote plurality.

History

The origin of bitcoin is that of a recent one. On Aug. 18, 2008, the domain name bitcoin.org was registered and a few days later on 31st October, 2008, Satoshi Nakamoto publishes the white paper on bitcoin.org entitled "Bitcoin: A Peer-to-Peer Electronic Cash System." This is now the Magna Carta for Bitcoin operations today. The first Bitcoin was mined in January, 2009, and was named Block 0 which or the "genesis block". Around the same time, on January 8, 2009, the first version of the Bitcoin software was announced on The Cryptography Mailing list and since thereafter, Bitcoin mining began in full force.

How does it work?

Bitcoins are released to come into circulation through the process calledBitcoin mining which involves solving a computationally difficult puzzle and in the process discover a new blockwhich is added to the block chain, and reward in the form of few bitcoins is gained.

In Bitcoin network, there are independent individuals and companies who own the governing computing power, participate in the Bitcoin network and also act as a decentralized authority to ensure credibility. They are known as miners. In this network, new bitcoins are released to the miners at a fixed and periodically declining rate. Bitcoin uses peer-to-peer technology to facilitate instant payments and is one of the first of this kind.

In Bitcoin network, there are independent individuals and companies who own the governing computing power, participate in the Bitcoin network and also act as a decentralized authority to ensure credibility. They are known as miners. In this network, new bitcoins are released to the miners at a fixed and periodically declining rate. Bitcoin uses peer-to-peer technology to facilitate instant payments and is one of the first of this kind.

One bitcoin is divisible up to 8 decimal places. The smallest unit is referred to as a Satoshi.Balances are kept using a key system, i.e. public and private "keys," which are long strings of numbers and letters linked through the mathematical encryption algorithm that was used to create them. The public key is like a bank account number where the address is published to the world to which others may send bitcoins. The private key is comparable to an ATM PIN is meant to be kept confidential to authorize Bitcoin transmissions.

How to earn?

There are many ways to earn bitcoins such as by accepting them as a means of payment for products sold or services provided. It can be earned by adding it as a payment option. There are Bitcoin merchant tool (such as an external processor like Coinbase or BitPay). Self-employed people can ask to get paid in bitcoins. There are several websites now which use digital currency such as WorkForBitcoin which brings together work seekers and prospective employers through its website and encourages the use of Bitcoins. Others include Coinality which features jobs of all kinds and offer payment in bitcoins; Dogecoin; Litecoin; and Jobs4Bitcoins.

Another interesting way to earn bitcoins is by to lend them out, and being repaid in the digital currency. Lending of Bitcoins can take either of the three forms: one, direct lending to someone you know; two, through a website which facilitates peer-to-peer transactions wherein it pairs borrowers and lenders; or three, depositing bitcoins in a virtual bank that offers a certain interest rate for Bitcoin accounts such as Bitbondand BTCjam.

The main risks that bitcoin trading faces today is that of regulation, security, insurance, fraud, market and tax.

Currently, there are no physical bitcoins but are only in the form of balances kept on a public ledger in the cloud. They are neither banknor government issued or backedand individual bitcoins are not valuable as a commodity as it is not considered a legal tender. However, as of April 2017, value of one bitcoin is $1,223 which is a considerable jump from late 2016 when it was around $770.Their rise is impressive and earning some is a great idea!

LegalEdge

Bhopal (Head Office): 127, Second Floor, Zone-II, MP Nagar, Bhopal, 0755-4057435.

COPYRIGHT ©2019. ALL RIGHTS RESERVED: LEGALEDGE.