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Key pointsBitcoin is an electronic currency known as a cryptocurrencyThe peer-to-peer technology underpinning it's known as the blockchain a people ledger of transactionsBitcoins can be stored in a digital wallet and used to buy other currencies or actual 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 individuals mined thousands of relatively worthless bitcoins as a hobby years back, only to now realise they're rich.One IT worker even threw out a hard drive containing 7,500 bitcoins.
This is done with no central authority or bank.Who created itBitcoin and the blockchain technology was created by someone under the pseudonym of Satoshi Nakamoto and published as a working beta in 2009. Satoshi's true identity remains a puzzle as he vanished from the scene in 2010 after seemingly handing over the reins into Gavin Andresen, the chief scientist at the Bitcoin Foundation.Over the years numerous people 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 eighth decimal place (0.00000001BTC) to buy smaller goods using just a fraction of the coin.How would you store or send bitcoinYou can shop and send bitcoins via an encrypted electronic wallet, which is run as a program on your computer.The wallet works using two keys a private key and a public key which look to be a seemingly random string of numbers and letters.The private key is kept secret by you and functions as a password that unlocks the wallet and allows you to send any bitcoins associated with it.
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In case the website gets hacked or someone gets your login information they can get and drain your funds from the exchange.There is no way to get a transaction to be revoked or revoked if a thief sends your important site bitcoins for their wallet.After buying your coins you should 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 (this is known as a newspaper wallet) and stick it in a safe.If you don't store the private key on your computer or reference 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 the others, it's a purely digital entity of questionable worth and dubious origin. But what's Bitcoin, in the most basic senseIn most casual conversations, you can get away with knowing that bitcoin is, essentially, a digital currency.
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In fact, 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 an electronic currency (bitcoin, lowercase). Bitcoin the stage is built on the concept of proof of work information which is expensive and time-intensive to create but can be readily verified.
To mine a bitcoin, a computer must finish a complicated algorithm, essentially going through the job of an extensive calculation in exchange for a few newly minted currency. That piece of digital currency is worth whatever the market decides through supply and demand.Transactions are connected to a users Bitcoin speech, which is saved on its general ledger, called the blockchain.
This relative anonymity makes the system appealing for things such as incognito purchases within the internet.A key component of Bitcoins blockchain is the simple fact it is an open, distributed ledger. Through the distributed nature of this ledger, the transactions on the blockchain are confirmed from the consensus of every member, offering protection and trust with no third-party overseer.One of the most important things to keep in mind when thinking about what Bitcoin (or even bitcoin) is: there is no single answer.