Bitcoin Currency

21/08/2013 15:06

Bitcoin is a crptytocurrency. The creation and transferring of bitcoins relies on an open-source cryptographic protocol that is not controlled by any central authority. The bitcoins can be transferred easily through a smartphone or a computer without any financial institution being involved. The system was developed by Satoshi Nakamoto, a pseudonyms developer, who referred it as peer-to-peer electronic cash system.

The processing of bitcoin transaction is made secure by servers that are referred to as bitcoin miners. The servers communicate through the internet-based network and transactions are confirmed by being added to a ledger. The ledger is updated and also archived after a predetermined period of time by a peer-to-peer file sharing technology. Each ledger update gives rise to newly minted bitcoins.

Bitcoin is accepted for trade by individuals and merchants in many parts of the world. The bitcoins are mainly used for trading of illicit drugs and drugs. Bitcoin has been tapped as a digital currency although many critics have always stated that bitcoins exchange rate is very volatile, inflexible in supply, has minimal use in trade and high risk of loss.

A user is allowed one or more bitcoin addresses from which he/she can send or receive bitcoin by a website or by simply downloading software called “wallet” that acts as a digital wallet. The funds of a user are held by a bitcoin service provider on their behalf and are provided with addresses that are connected to their accounts.

The addresses have a public and private key. The private key is always stored in a digital wallet or a mobile device and is protected by a password or another suitable authentication means that is used for commencing a transaction. The vendors give users coins and bank notes that are denominated in bitcoins. What is actually sold is a bitcoin private key. For one to access the key he/she should break a seal and the receiving address is visible so that balanced can be easily confirmed.

By using various  bitcoin exchange   , bitcoins are traded at varying prices against other major currencies. There has been an appreciation of the bitcoin in relation to other currencies such as the Euro, the US dollar and the British pound. The value of the money supply of the bitcoin network is estimated to be $1.4 billion USD.

Although the Bitcoin Project is described as being experimental, many people trade them as investment. Bitcoins are subject to theft just many assets. Many investors have turned into entrepreneurs in the growing bitcoin universe.

Bitcoin transactions are known to relatively anonymous and this as seen it being used as a medium of exchange in the online black market. Some bitcoin optimists see this association as having a bad impact on the perception of the currency. Anonymity is achieved in bitcoin by using many unique addresses for every wallet.

If you are looking where you can invest your money the you may consider trying your luck with the bitcoin exchange and it might be the thing that you might be wishing for a long time.