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Key pointsBitcoin is a digital currency known as a cryptocurrencyThe peer-to-peer technology underpinning it is known as the blockchain a public ledger of transactionsBitcoins can be stored in a digital wallet and used to buy 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 cases where people mined thousands of relatively useless bitcoins as a hobby years back, only to now realise they're 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 created itBitcoin and the blockchain technology was made by someone under the pseudonym of Satoshi Nakamoto and published 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 at the Bitcoin Foundation.Over the years numerous people have promised to become 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 eighth decimal place (0.00000001BTC) to purchase smaller goods using just a fraction of the coin.How do you store or send bitcoinYou can shop and send bitcoins from an encrypted digital wallet, which can be run as an app on your computer.The wallet functions using two keys a private key and a public key which seem to be a seemingly random string of numbers and letters.The private key is kept confidential by you and acts as a password that unlocks the wallet and allows you to send any bitcoins associated with that.
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In case the web site gets hacked or someone gets your login information they can access and drain your funds from the exchange.There is no way to get a transaction to be reversed or recovered if a thief sends your bitcoins for their wallet.After buying your coins you need to transfer them into a secure digital pocket made by you and not hosted online.You can even write down the wallet's private key on a sheet of paper (that is known as helpful hints 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 access your funds.
Bitcoin means different things to different individuals. For many, it's a future of moving currency untied to any central bank. To others, it's a purely digital entity of questionable worth and dubious origin. But what is Bitcoin, in the most basic senseIn most casual conversations, you can eliminate knowing that bitcoin is, basically, a digital currency.
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In reality, it is two considerably more complicated things.Bitcoin has been with us since 2009, when a person (or group) under the pseudonym Satoshi Nakamoto introduced a platform (Bitcoin, uppercase) that hosts a digital currency (bitcoin, lowercase). Bitcoin the stage is built on the concept of proof of work data that is expensive and time-intensive to produce but can be easily verified.
To mine a bitcoin, a computer must complete a complicated algorithm, essentially page going through the job of an extensive calculation in exchange for a few newly minted currency. That bit of electronic currency is worth whatever the market decides through supply and demand.Transactions are connected to a users Bitcoin address, which can be saved on its own general ledger, called the blockchain.
This comparative anonymity makes the platform appealing for things such as incognito purchases within the internet.A key component of Bitcoins blockchain is the fact that it is an open, distributed ledger. Throughout the distributed nature of the ledger, the transactions on the blockchain are verified by the consensus of each member, offering protection and trust without a third-party overseer.One of the most important things to bear in mind when thinking about exactly what Bitcoin (or bitcoin) is: there is no single answer.