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What Is Bitcoin? - Cnnmoney

What Is Bitcoin? - Cnnmoney

Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need to give your real name. More merchants are beginning to accept them: You can buy webhosting services, pizza or even manicures. Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value. Several marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies. Mt. Gox is the largest bitcoin exchange. People can send bitcoins to each other using mobile apps or their computers. It’s similar to sending cash digitally. People compete to “mine” bitcoins using computers to solve complex math puzzles. This is how bitcoins are created. Currently, a winner is rewarded with 25 bitcoins roughly every 10 minutes. Bitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. The wallet is a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money. Unlike bank accounts, bitcoin wallets are not insured by the FDIC. Wallet in cloud: Servers have been hacked. Companies have fled with clients’ Bitcoins. Wallet on computer: You can accidentally delete them. Viruses could destroy them. Though each bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed – only their wallet IDs. While that keeps bitcoin users’ transactions Continue reading >>

Faq - Bitcoin

Faq - Bitcoin

Find answers to recurring questions and myths about Bitcoin. Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence. Bitcoin is the first implementation of a concept called "cryptocurrency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010 without revealing much about himself. The community has since grown exponentially with many developers working on Bitcoin. Satoshi's anonymity often raised unjustified concerns, many of which are linked to misunderstanding of the open-source nature of Bitcoin. The Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software. Just like current developers, Satoshi's influence was limited to the changes he made being adopted by others and therefore he did not control Bitcoin. As such, the identity of Bitcoin's inventor is probably as relevant today as the identity of the person who invented paper. Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the s Continue reading >>

Everything You Need To Know About Bitcoin, Its Mysterious Origins, And The Many Alleged Identities Of Its Creator

Everything You Need To Know About Bitcoin, Its Mysterious Origins, And The Many Alleged Identities Of Its Creator

On January 3, 2009, 30,000 lines of code spell out the beginning of Bitcoin. A copy of bitcoin standing on PC motherboard is seen in this illustration picture Bitcoin runs through an autonomous software program that is 'mined' by people seeking bitcoin in a lottery-based system. Over the course of the next 20 years, a total of 21 million coins will be released. But Satoshi Nakamoto didn't work entirely alone. Among Bitcoin's earliest enthusiasts was Hal Finney, a console game developer and an early member of the "cypherpunk movement" who discovered Nakamoto's proposal for Bitcoin through the cryptocurrency mailing list.  In a blog post from 2013, Finney says he was fascinated by the idea of a decentralized online currency. When Nakamoto announced the software's release, Finney offered to mine the first coins — 10 original bitcoins from block 70, which Satoshi sent over as a test. Of his interactions with Nakamoto, Finney says, "I thought I was dealing with a young man of Japanese ancestry who was very smart and sincere. I've had the good fortune to know many brilliant people over the course of my life, so I recognize the signs." Finney has flatly denied any claims that he was the inventor of Bitcoin and has always maintained his involvement in the currency was only ever secondary.  In 2014, Finney died of the neuro-degenerative disease ALS. In one of his final posts on a Bitcoin forum , he said Satoshi Nakamoto's true identity still remained a mystery to him. Finney says he was proud of his legacy involving Bitcoin, and that his cache of bitcoins were stored in an offline wallet, left as part of an inheritance to his family.  "Hopefully, they'll be worth something to my heirs," he wrote. As of today, one bitcoin is worth more than $10,000.   Nearly a year lat Continue reading >>

The History Of Bitcoin & How Bitcoin Is Used | Genesis Mining

The History Of Bitcoin & How Bitcoin Is Used | Genesis Mining

Finance, like most human inventions, is constantly evolving. In the beginning it was basic: food was traded for livestock, and livestock for resources like wood, or maize. It progressed to precious metal, such as silver and gold. And now, the next step in financial evolution has come to light. This new form of currency has been constantly evolving over the past decade, developed by an unknown person and maintained by a collective group of the brightest minds in technology. It’s a new form of money that is created and held digitally, and the most important part, of course, is that no government owns it, or decides its value - the peer-to-peer network community does. Historically, U.S. currency has been based on gold - you could give a dollar to the bank and receive a set amount back in gold. In contrast, Bitcoin isn’t based on silver or gold - it’s based on mathematical proofs validated by a public ledger called blockchain technology. Bitcoin is generated through a complex sequence of mathematical formulas that run on computers; the network shares a public ledger using blockchain technologies that record, and validate, every transaction processed. A single institution, such as the government, does not control the Bitcoin network. The idea behind the technology has always been - and remains - one of decentralization - that is, remaining completely independent of a central authority, like a bank, a government, or a country. Anyone can access the open-source software that makes Bitcoin work, and its those individuals interested that maintain it. But, who invented Bitcoin? Is it a valid and legitimate currency like USD? And why did nobody think of this before? But before we begin, let’s talk about the creator of Bitcoin - or rather, the anonymous pseudonym that firs Continue reading >>

A Short History Of Bitcoin And Crypto Currency Everyone Should Read

A Short History Of Bitcoin And Crypto Currency Everyone Should Read

A Short History Of Bitcoin And Crypto Currency Everyone Should Read {{article.article.images.featured.caption}} Opinions expressed by Forbes Contributors are their own. The author is a Forbes contributor. The opinions expressed are those of the writer. This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe Bitcoin hit news headlines this week as the price of one unit of the cryptocurrency passed $11,500 for the first time. Although it’s often referred to as new, Bitcoin has existed since 2009 and the technology it is built on has roots going back even further. In fact if you had invested just $1,000 in Bitcoin the year it was first publicly available, you would now be richer to the tune of £36.7 million . Those who don’t learn from history are doomed to repeat its mistakes – so here is a brief history of Bitcoin and cryptocurrency. Although Bitcoin was the first established cryptocurrency , there had been previous attempts at creating online currencies with ledgers secured by encryption. Two examples of these were B-Money and Bit Gold, which were formulated but never fully developed. A paper called Bitcoin – A Peer to Peer Electronic Cash System was posted to a mailing list discussion on cryptography. It was posted by someone calling themselves Satoshi Nakamoto, whose real identity remains a mystery to this day. The Bitcoin software is made available to the public for the first time and mining – the process through which new Bitcoins are created and transactions are recorded and verified on the blockchain – begins. 2010 – Bitcoin is valued for the first time As it had never been traded, only mined, it was impossible to assign a monetary value to the units of the emerging cryptocurrency. Continue reading >>

What Is Bitcoin? - Coindesk

What Is Bitcoin? - Coindesk

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems. It’s the first example of a growing category of money known as cryptocurrency. What makes it different from normal currencies? Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally. However, bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money. A software developer called Satoshi Nakamoto proposed bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees. No one. This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. Those banks can simply produce more money to cover the national debt, thus devaluing their currency. Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are ‘ mined’ , using computing power in a distributed network. This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network. So you can’t churn out unlimited bitcoins? That’s right. The bitcoin protocol – the rules that make bitcoin work Continue reading >>

Where Did Bitcoin Come From?

Where Did Bitcoin Come From?

Bitcoin was invented by a person or group of people using the name Satoshi Nakamoto. Does anyone know who this really is? Despite many articles and investigation to unmask the person(s), there is still no conclusive evidence of who they are. Does it matter? Not at all. Satoshi designed the entire Bitcoin system in an open source manner - this means the code is available for everyone to inspect and see, so there are no hidden secrets, and no influence on it from the creator. Over time many others have also worked on this code so its already very different from the initial outline Satoshi proposed. Its also worth mentioning that there is a common misconception that Satoshi invented Bitcoin all by himself. Like many big breakthroughs in the sciences, Satoshis invention was built on the shoulders of giants. For the past few decades many top scientists, engineers and mathematicians were involved in research around cryptography, systems and so on. Satoshi managed to pull all of this work together into one coherent plan and then helped to start implement it. If you read the Satoshi whitepaper youll even notice that he references all the other work on which he relied to complete his invention. Bitcoin was invented by Satoshi, standing on the shoulders of giants. Continue reading >>

Bitcoin: What Is It And Where Did It Come From?

Bitcoin: What Is It And Where Did It Come From?

In my opening post,I cited Bitcoin's skyrocketing price as a distraction from blockchain's potential to be the most revolutionary innovation since the creation of the internet. In addition to distracting from blockchain's promise, I think that the price of bitcoin the currency serves as a distraction from just how revolutionary Bitcoin the technology truly is. While the mainstream media debates endlessly on whether or not bitcoin merits its $12,000 price tag, they don't seem to spend much time covering just how incredible it is that a $200 billion dollar global financial network without any formal government or corporate structure cropped up out of nowhere. Where Bitcoin came from and how it works is a fascinating story which I'll attempt to cover here. Before I go into the Bitcoin origin story in depth, here it is in one paragraph: In 2008, some anonymous person (or group) using the name Satoshi Nakamoto published an 8 page paper to an internet forum that laid out the framework for an internet currency that operated outside of banks and governments.To keep the currency secure, Nakamoto came up with a clever system that would incentivize people all over the world to run software that would secure the network by maintaining a shared record of transactions (blockchain).This software was open sourced which means that anyone in the world could contribute to it and help make it better. In the years since it was unleashed on the internet, thousands of people contributed to the code, built businesses and infrastructure around the Bitcoin network and adopted the currency.In that time,the value of one bitcoin went from eight hundredths of a penny to over $12,000;a $200 billion global financial network emerged from the depths of the internet. To this day, Satoshi Nakamoto's iden Continue reading >>

The Origin Of Bitcoin

The Origin Of Bitcoin

The most important aspect of bitcoin may be the concept behind it. Bitcoin was created by developer Satoshi Nakamoto. Rather than trying to design a completely new payment method to overthrow the way we all pay for things online, Satoshi saw certain problems with existing payment systems and wanted to address them. The concept of bitcoin is rather simple to explain: During the financial crisis of 2008, people from all over the world felt its debilitating economic effects. And at the time of this writing (early 2016), many are still feeling the effects in terms of the dwindling value of their fiat currency (the currency approved by a countrys government). As the global financial system teetered on the brink of collapse, many central banks engaged in quantitative easing or in simple terms, turned on the printing presses. Central banks flooded the markets with liquidity and slashed interest rates to near zero in order to prevent a repeat of the Great Depression of the 1930s. The effect of this was large-scale fluctuations in fiat currencies and what has since been termed currency wars a race to competitively devalue so that an economy can become more viable simply by its goods and services being cheaper than those of its neighbors and global competitors. The response of central banks around the world was the same as it always has been when these things happen: Governments had to bail out affected banks and they printed extra money, which further devalued the existing money supply. In bailing out the banks, there was a net transfer of debt to the public purse, thus adding to future taxpayer liabilities. This created a sense of social injustice among some quarters. Aside from that, no one really knows what the long-term effects of quantitative easing will be. Perhaps inflat Continue reading >>

A Brief History Of Bitcoin - And Where It's Going Next

A Brief History Of Bitcoin - And Where It's Going Next

Despite the above, Satoshi Nakamoto releases his white paper , revealing his idea for a purely peer-to-peer version of electronic cash to the world. In his vision, he manages to solve the problem of money being copied, providing a vital foundation for Bitcoin to grow legitimately. The first block, nicknamed Genesis is launched allowing the initial mining of Bitcoins to take place. Later that month, the first transaction takes place between Satoshi and Hal Finney, a developer and cryptographic activist. Bitcoin receives an equivalent value in traditional currencies. The New Liberty Standard established the value of a Bitcoin at $1 = 1,309 BTC. The equation was derived so as to include the cost of electricity to run the computer that created the Bitcoins in the first place. The worlds first Bitcoin market is established by the now defunct dwdollar. A programmer living in Florida named Laslo Hanyecz sends 10,000BTC to a volunteer in England, who spent about $25 to order Hanyecz a pizza from Papa Johns. Today that pizza is valued at 1,961,034 and stands as a major milestone in Bitcoins history . Bitcoin is hacked. A vulnerability in how the system verifies the value of Bitcoin is discovered, leading to the generation of 184 billion Bitcoins. The value of the currency from a high of $0.80 to $1 in June drops through the floor. Bitcoin goes under the spotlight. After the hack in August and a subsequent discovery of other vulnerabilities in the blockchain in September an inter-governmental group publishes a report on money laundering using new payment methods. Bitcoin, it suggested could help people finance terrorist groups. Bitcoin reaches $1 million. Based on the number of Bitcoins in circulation at the time, the valuation leads to a surge in Bitcoin value to $0.50/BTC. The Continue reading >>

Economics - Where Do Bitcoins Come From And What Gives Them Their Value? - Bitcoin Stack Exchange

Economics - Where Do Bitcoins Come From And What Gives Them Their Value? - Bitcoin Stack Exchange

Where do bitcoins come from and what gives them their value? Where do bitcoins come from? From the WeUseCoins.com video it appears they are just being produced by "miners" and sold to people. So who backs Bitcoin or gives it its value? if there are only 21,000,000 bitcoins where/who do the mined bitcoins copme from? user9947 Dec 2 '13 at 22:05 @Jonah There will only ever be around 21 million Bitcoins. Right now, there are fewer than that. The mined Bitcoins come from the mining process. Bitcoins are basically just numbers and the process of mining is the process of generating numbers. David Schwartz Jan 10 '14 at 22:35 Although individual bitcoins enter the Bitcoin economy as miners are rewarded for processing transactions, it's much more helpful to think of all 21 million bitcoins as having been created when Satoshi Nakamoto defined the Bitcoin protocol and launched the Bitcoin network in 2009. The reason for this is that the Bitcoin protocol specifically defines and controls when and how a limited total number of coins are rewarded to miners for the job of securing the Bitcoin network. These "bitcoins" are really just mathematical tokens which are very carefully controlled by the network protocol to prevent counterfeiting, theft, etc. By agreeing to use these mathematical tokens as money, the larger Bitcoin community is essentially "backing" their value and turning them into a currency in the same way traditional African and Asian societies used the money cowry despite the absence of any central bank. Unlike the money cowry: they can be divided into as small of pieces as you want and they can be transferred instantly across great distances via a digitalconnection such as the internet. Presumably, the members of the Bitcoin community who choose to accept them as money Continue reading >>

Bitcoin - Wikipedia

Bitcoin - Wikipedia

Unspent outputs of transactions denominated in any multiple of satoshis [3] :ch. 5 12.5 bitcoins per block (approximately every ten minutes) until mid 2020, [7] and then afterwards 6.25 bitcoins per block for 4 years until next halving. This halving continues until 2110–40, when 21 million bitcoins will have been issued. ^ The symbol was encoded in Unicode version 10.0 at position U+20BF ₿ BITCOIN SIGN in the Currency Symbols block in June 2017. [2] Bitcoin is a worldwide cryptocurrency and digital payment system [8] :3 called the first decentralized digital currency , as the system works without a central repository or single administrator. [8] :1 [9] It was invented by an unknown person or group of people under the name Satoshi Nakamoto [10] and released as open-source software in 2009. [11] The system is peer-to-peer , and transactions take place between users directly, without an intermediary. [8] :4 These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain . Bitcoins are created as a reward for a process known as mining . They can be exchanged for other currencies, [12] products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. [13] Bitcoin can also be held as an investment. According to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin. [14] The word bitcoin first occurred and was defined in the white paper [15] that was published on 31 October 2008. [16] It is a compound of the words bit and coin . [17] The white paper frequently uses the shorter coin. [15] There is no uniform convention for bitcoin capitalization. Some sources use Bitcoin, capitalized, to Continue reading >>

Bitcoin Faq: Where Do Bitcoins Come From, And Can I Get Rich By Miningthem?

Bitcoin Faq: Where Do Bitcoins Come From, And Can I Get Rich By Miningthem?

Bitcoin FAQ: Where do Bitcoins come from, and can I get rich by miningthem? Bitcoins are created in a process calledMining From an origional postcard in the LaTrobe collection of the State Library of Victoria, Canada. With mutilations byauthor Bitcoins are created in a process called mining, where a computer repeatedly works through a series of calculations that are designed to be difficult to solve, but to lead to a specific answer. In technical terms, the miners are looking for a number that, when hashed, produces a result with a specific number of consecutive zeros in it. Dont worry if you dont understand what hashing is: you dont have to know about that to mine. The miner that finds the right answer to these calculations is given a reward for their hard work: 25 Bitcoins. This process is called solving the block. Once the block has been solved, the process restarts, and the miners start looking for the next solution. This process runs repeatedly, with an average of one block being solved (and thus 25 Bitcoins being created) every 10 minutes or so. You can see the blocks being solved here . The short answer is No, unless you started some time ago. The long answer is more complicated. Solving an odd math puzzle might sound like money for nothing, but there is a real cost involved: the cost of the computers that do the solving, and the electricity they use. When you start running your computers at high speed 24/7, your electricity bill goes up. A puzzle that gets harder the more you try and solve it: from kH/S to MH/s to GH/s. That sounds pretty simple so far: computers are good at crunching numbers, and an average computer can run several thousand of these calculations (called hashes) a second. But there is a catch: to restrict the flow of new Bitcoins, the difficult Continue reading >>

Bitcoin Inventor Satoshi Nakamoto Finally Revealed

Bitcoin Inventor Satoshi Nakamoto Finally Revealed

Australian entrepreneur Craig Wright says he's the inventor of the digital currency bitcoin . Wright told the BBC that he is Satoshi Nakamoto, the shadowy creator of the cryptocurrency, in a move that could end the years-long search for the inventor. In a follow-up blog post on Monday, Wright thanked everyone who helped out in bitcoin's beginnings. "I have been staring at my screen for hours, but I cannot summon the words to express the depth of my gratitude to those that have supported the bitcoin project from its inception too many names to list. You have dedicated vast swathes of your time, committed your gifts, sacrificed relationships and REM sleep for years to an open source project that could have come to nothing. And yet still you fought. This incredible community's passion and intellect and perseverance has taken my small contribution and nurtured it, enhanced it, breathed life into it. You have given the world a great gift. Thank you," Wright wrote. "Be assured, just as you have worked, I have not been idle during these many years. Since those early days, after distancing myself from the public persona that was Satoshi, I have poured every measure of myself into research. I have been silent, but I have not been absent. I have been engaged with an exceptional group and look forward to sharing our remarkable work when they are ready." To prove his claim, Wright digitally signed a message using the cryptographic keys that were associated with the creator and was backed up by experts. "These are the blocks used to send 10 bitcoins to Hal Finney in January [2009] as the first bitcoin transaction," Wright told the BBC. Wright said Finney helped turn his vision of bitcoin into reality. Jon Matonis, co-founder of the nonprofit Bitcoin Foundation, said he believed Wri Continue reading >>

History Of Bitcoin - Wikipedia

History Of Bitcoin - Wikipedia

Number of bitcoin transactions per month (logarithmic scale) Bitcoin is a cryptocurrency , a digital asset designed to work as a medium of exchange that uses cryptography to control its creation and management, rather than relying on central authorities . [1] The presumed pseudonymous Satoshi Nakamoto integrated many existing ideas from the cypherpunk community when creating bitcoin. Prior to the release of bitcoin there were a number of digital cash technologies starting with the issuer based ecash protocols of David Chaum [2] and Stefan Brands . Adam Back developed hashcash , a proof-of-work scheme for spam control. The first proposals for distributed digital scarcity based cryptocurrencies were Wei Dai 's b-money [3] and Nick Szabo 's bit gold . [4] [5] Hal Finney developed reusable proof of work (RPOW) using hashcash as its proof of work algorithm. [6] In the bit gold proposal which proposed a collectible market based mechanism for inflation control, Nick Szabo also investigated some additional enabling aspects including a Byzantine fault-tolerant asset registry to store and transfer the chained proof-of-work solutions. [5] There has been much speculation as to the identity of Satoshi Nakamoto with suspects including Wei Dai , Hal Finney and accompanying denials. [7] [8] The possibility that Satoshi Nakamoto was a computer collective in the European financial sector has also been discussed. [9] On 18 August 2008, the domain name bitcoin.org was registered. [10] Later that year on October 31st, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System [11] was posted to a cryptography mailing list. [10] This paper detailed methods of using a peer-to-peer network to generate what was described as "a system for electronic tra Continue reading >>

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