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Key pointsBitcoin is a digital currency known as a cryptocurrencyThe peer-to-peer technology underpinning it's known as the blockchain a public ledger of all transactionsBitcoins can be stored in a virtual wallet and used to Purchase other currencies or real world goods
Where once a single bitcoin has been worth a few cents it is now worth about $9,200 per coin (November 2017), creating millionaires in the process.There have been many reported instances where individuals mined thousands of relatively worthless bitcoins as a hobby years back, only to now realise they are rich.One IT employee even threw out a hard drive containing 7,500 bitcoins.
All this is done without a central authority or bank.Who generated itBitcoin and also the blockchain technology was created by someone under the pseudonym of Satoshi Nakamoto and released as a working beta in 2009. Satoshi's true identity remains a mystery as he disappeared from the scene in 2010 after seemingly handing over the reins to Gavin Andresen, the chief scientist in the Bitcoin Foundation.Over the years numerous individuals have promised to be Satoshi, including Australian computer scientist Craig Wright.
Once the limit is reached, no longer bitcoins can be made.However, a single bitcoin can be subdivided as far down as the decimal place (0.00000001BTC) to purchase smaller goods using only a fraction of the coin.How do you shop or send bitcoinYou can store and send bitcoins from an encrypted digital wallet, which is run as an app on your computer.The wallet functions using two keys that a private key and a public key which seem like a seemingly random string of numbers and letters.The private key is kept secret by you and acts as a password that unlocks the wallet and allows you to send any bitcoins associated with it.
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If the website gets hacked or someone gets your login information they could get and drain your funds from the exchange.There is no way to get a transaction to be revoked or revoked if a burglar sends your bitcoins for their wallet.After buying your coins you should transfer them to a secure digital wallet created by you and not hosted online.You can even write down the wallet's private key on a piece of paper (this is known as a paper wallet) and stick it in a safe.If you don't save the private key on your computer or online then recipients can never break in and get your funds.
Bitcoin means different things to different people. For many, it's a future of freely moving currency untied to any central bank. To the others, it's a purely electronic entity of questionable value and doubtful origin. However, what's Bitcoin, in the most elementary senseIn most casual conversations, you can get away with knowing that bitcoin is, essentially, an electronic currency.
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In reality, it is two much more complicated things.Bitcoin has been with us since 2009, when a person (or the original source group) under the pseudonym Satoshi Nakamoto introduced a platform (Bitcoin, uppercase) that hosts a digital currency (bitcoin, lowercase). Bitcoin the platform is built on the concept of evidence of work data that is expensive and time-intensive to create but can be readily verified.
To mine a bitcoin, a computer has to finish a complicated algorithm, essentially going through the job of an extensive calculation in exchange for a few newly minted currency. That piece of electronic currency is worth whatever the market determines through supply and demand.Transactions are connected to a users Bitcoin speech, which is stored on its general ledger, called the blockchain.
This comparative anonymity makes the system appealing for things such as incognito purchases over the internet.A key component of Bitcoins blockchain is the simple fact it is an open, distributed ledger. Throughout the distributed nature of the ledger, the transactions on the blockchain are verified from the consensus of every member, offering protection and trust without a third-party overseer.One of the most important things to keep in mind when thinking about exactly what Bitcoin (or even bitcoin) is: there is no single answer.