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 >>
Bitcoin Price Latest: Cryptocurrencies Including Ethereum, Litecoin And Ripple All Decline In Value
Bitcoin price latest: Cryptocurrencies including ethereum, litecoin and ripple all decline in value All but two of top 50 virtual coins by market capitalisation slump Bitcoins price has dropped by 6.15 per cent over the last 24 hours - while almost all of thealternatives to the market leading cryptocurrency are also in decline. At the time of publication, all but two of the top 50digital currencies by market capitalisation have fallen in value since yesterday, according to CoinMarketCap. Bitcoin is now valued at $10,526(7,594) as a result of the drop - thought to have been sparked by the US Securities and Exchange Commission warning that platforms being used to trade digicoinswill ultimately have to be registered before they are allowed to continue operating. Ethereum , the second most valuable digital currency, is down 7.62 per cent to $799.61(576.96) while ripple XRP , the third most valuable digital currency, is down 6.81 per cent to $0.90 (0.65). :: Follow the latest bitcoin news on our liveblog Bitcoin cash and litecoin , which complete the top five, are down 6.81 per cent and 7.01 per centrespectively. They are now valued at $1,153 (832) and $189.49 (137) in turn. Golem, ranked 55 of the 1,541 digital coins on the market,suffered the biggest decline of anyone in the top 100, having fallen by 16.63 per cent to $0.38 (0.27). A picture shows Singulato Motors' concept car Tigercar P0 at a workshop in Beijing, China Connected company president Shigeki Tomoyama addresses a press briefing as he elaborates on Toyota's "connected strategy" in Tokyo. The Connected company is a part of seven Toyota in-house companies that was created in April 2016 A Toyota Motors employee demonstrates a smartphone app with the company's pocket plug-in hybrid (PHV) service on the cockpit of Continue reading >>
What Determines The Value Of Bitcoin?
Join our community of 10 000 traders on Hacked.com for just $39 per month. Bitcoins value is a perceived regard for its benefits and usefulness. The term value, as used here, is not to be confused with price , which is the monetary cost of a bitcoin . The usefulness and consequent value of Bitcoin is a result of many aspects of its innovation, its network, and its features. This guide discusses the most important factors that lead its users to consider Bitcoin to be valuable. To the general field of Science, the Bitcoin innovation is valuable for having solved the long-standing Two Generals Problem (or Byzantine Generals Problem). Satoshi Nakamoto s clever solution to the dilemma of digital double-spending is achieved via a self-organizing and time-based consensus record. The blockchain, a shared public ledger, is maintained by the peer-to-peer nodes that populate the Bitcoin network. Because Bitcoin is decentralized via a distributed peer-to-peer network, there is no central server that the Bitcoin protocol depends upon for its existence. Like BitTorrent, Bitcoin is, therefore, censorship-resistant it cannot be shut down. This aspect of Bitcoin is critical since it means that Bitcoins continued usage is not subject to any external authoritys approval, opinion or action. Being a censorship-resistant alternative to official currency and payment systems makes Bitcoin an irreversible disruptive technology. Satoshi Nakamotos innovations in the field of Computer Science are significant milestones. In addition, a social implication of the way Bitcoin innovates payment and transactions is that it eliminates Trust. A distributed ledger and decentralized network means that no single entity needs to be trusted in order for the Bitcoin protocol to function. Each Bitcoin user owns Continue reading >>
Why Do Bitcoins Have Value?
Bitcoin was launched in 2009 as the world's first decentralized, private digital currency. Because it has no physical denominations , Bitcoin only exists inside of an interlinked computer network system. This is not entirely unique, as much of the U.S. dollar supply only exists in digital account balances instead of as actual green pieces of paper. Bitcoins are generated, or " mined ," through a sequence of complex mathematical formulas run through computers. The anonymous creator of Bitcoins set a cap on total Bitcoin volume. Once that number hits 21 million, no more Bitcoins can be generated. These digital coins can then be bought or sold with other currencies and used as an investment or money to buy goods from any sellers who accept them. Economics teaches society that values are subjective; items have economic value because people desire them for one reason or another. Currencies, or mediums of exchange, serve several different and crucial functions in an economy. For one, they make trade easier; money currencies trade for nearly any good or service. For example, suppose a person has 5 units of lumber and wishes to purchase a dog. Without currency, his only option is to find a lumber-wanting dog owner. With currency, like U.S. dollars, he can sell the lumber to anyone who wants it and then use the money to purchase a dog. Currency also provides a universal measurement for accounting purposes. For instance, without currency, it is difficult to compare companies that sell different goods. Currency is used as a store of value , which makes saving, investing and banking easier. Some currencies, like gold, have value because they are useful as a commodity. Government fiat currencies, like the U.S. dollar, have value because governments grant them legal tender status an Continue reading >>
How Do People Give Value To Cryptocurrency And How Is The Price Of Cryptocurrency Defined? | Bitconnect
Precious metals gain their value/perceived value due to their utility and limited supply, and price is often tied to supply/demand. Supply/Demand is a simple economic factor that affects the price of many things. In some countries Bitcoin and other cryptocurrencies is classed as an asset, in others as a currency. Bitcoin, for example has a maximum of 21 million whole units, divisible 100 million times. With over 7 billion people on the planet, if even 1 billion were to adopt Bitcoin, 21 million whole units would not spread very far without a significant price tag. The supply is also bought in at a constant rate and is unchangeable due to the coconscious rules. This creates a supply that is limited, and thus people will pay more to get the coins they think have value. Block reward halvings, like the Bitcoin halving of 2016 caused the price to slowly increase as the halving approached, due to the reduced supply of new incoming coins imminent. This can affect the price of many cryptocurrencies, but in the case of Litecoin, did not even make a major dent in the price. The energy put into securing blockchains can be intensive. In the case of proof of work (POW) blockchains which are the most popular form, electricity usage can be intense. In the case of Bitcoin, the blockchain uses as much energy securing it at present as a small country uses. This has a factor on the price, as it takes a certain amount of energy on average to mine one Bitcoin. This goes up with difficulty increases. The more secure the blockchain and the higher the mining difficulty , the higher the perceived value and price and the harder the coins are to get through mining. This can have an impact on price and ties in with the energy usage above, in the case of proof of work blockchains such as Bitcoin a Continue reading >>
Commentary: Bitcoin's Value Explained | Fortune
Bitcoin is a different kind of beast that can be difficult for people to understand. New things usually are. And while Bitcoin is nearly nine years old, it represents a completely new type of asset. Let’s break down what I perceive to be the three major components of Bitcoin’s value: As investors near the Bitcoin iceberg, the first thing they see is payments—after all, it’s a cryptocurrency, right? Currencies are used for payments and so Bitcoin must be all about payments. It’s true: Bitcoin is certainly used for payments, and this is an important part of its value. However, it’s not widely used for payments and, while it may be increasingly important over time, it isn’t the most important component of Bitcoin’s value today. Why don’t people use Bitcoin for payments more often? Simply put, people don’t like to spend appreciating assets. Given the choice of payment methods, people like to spend in the “currency” that is likely to be worth the least tomorrow. At this point, that’s not Bitcoin. Furthermore, most people don’t buy Bitcoin for payments. That’s simply not why they acquired it. Even if you could, very few investors would pay for their coffee with Apple (AAPL) stock because that’s simply not the reason they bought Apple stock in the first place—same with Bitcoin. Lastly, people don’t generally use Bitcoin for payments because goods aren’t broadly priced in BTC terms. Goods aren’t broadly priced in BTC terms because, if they were, the price would have to update several times each minute just to maintain a consistent revenue for the seller. In short, the major drawback to using Bitcoin for payments is that it is volatile, which is neither a great ingredient for payments (medium of exchange) nor the pricing of goods (unit of Continue reading >>
Bitcoin Plunges, Sinking In Value Half From Sunday's High - Cnet
Bitcoin surged in value over most of 2017. Bitcoin, the cryptocurrency that's soared in value this year, plunged below $11,000 Friday morning, sinking by nearly half from a record high it hit less than a week ago. Heavy traffic disrupted trading in the cryptocurrency at one of the biggest Bitcoin marketplaces Friday morning. Coinbase said at about 8:30 PT that "buys and sells may be intermittently offline." It later said the high volume of trades had made its network unavailable for about two hours. The cryptocurrency, which allows anonymous transactions unrestricted by global borders, is popular with tech heads, people suspicious of government and -- more notoriously -- those seeking to launder money. But the eye-popping run-up in Bitcoin's value this year has lured more mainstream interest in cryptocurrencies purely as an investment opportunity. Bitcoin's lack of government backing and regulation, however, also leads to volatility, like the dramatic swings seen this week. Bitcoin dropped at one point Friday morning to $10,400, according to charts on exchange Coinbase . In Coinbase trading before trades halted, it was valued at about $13,450. Even though the cryptocurrency started the year at less than $1,000, it rocketed to a record high above $19,800 on Sunday. Though the price retrenched earlier this week to trade around $15,500 for much of Thursday, a selloff hit that afternoon and accelerated Friday morning. Investment firm Goldman Sachs reportedly plans to create a trading desk to handle digital currencies by the middle of next year, Bloomberg News reported Thursday, suggesting that mainstream investor interest could grow. But regulators have warned about cryptocurrencies' relative lack of investor protections, fostering an environment ripe for scams. Update, 8: Continue reading >>
Bitcoin Crash Drops It To Lowest Rate Since Early December | Digital Trends
Bitcoins meteoric rise in 2017 has faced its biggest downturn in quite some time. Just over a month on from hitting its lifetime value peak of more than $19,000, it has now fallen to less than $10,000. Those who diversified their cryptocurrency portfolio arent safe from the crash though, as bitcoins downturn has been felt by all the major alternative coins. Although cryptocurrencies have traditionally had rather volatile values, bitcoins has been near unprecedented over the past few months. It went from being worth $1,000 at the start of 2017, to $5,000 in November, to close to $20,000 just over a month later prompting many to ask whether the cryptocurrency bubble is about to burst . Its since fallen and has fluctuated between $12,000 and $16,000 in the weeks that followed, but todays dip is the largest weve seen in some time. At the time of writing, a single bitcoin is worth around $9,900, representing a fall of nearly $3,000 in the last 24 hours alone. The start of this latest crash took place on Monday, January 15, where it began to tumble from just under $14,000. Its bounced up and down since thenbut slowly trended down to the low point of $9,430, according to Coindesk . This latest drop has also pulled down some of the other most successful cryptocurrencies . Ethereum, the No. 2 cryptocurrency in the world, lost more than 20 percent of its value in the last 24 hours, dipping to $870 per ether at the time of writing. Ripple has followed suit, with a near 25 percent correction and litecoin is at its lowest rate in months. Some of this downturn has lead to some sad stories appearing on social media. Those who spent more than they could afford to lose during the December peak are now watching their investments dwindle and disappear. We would always recommend you do yo Continue reading >>
Skeptics Say Bitcoin Has No Value. Heres Why Theyre Wrong
On Tuesday, it was trading at $11,943 , a decline of 12 percent, according to CoinDesk. As bitcoin's popularity surges and its price rises and falls, more and more people are asking the same question: How does bitcoin , something that's essentially invisible and intangible, have value? In economics, something has value if it checks the following two boxes: scarcity and utility. Scarcity just means that something has a finite supply. In the case of bitcoin, the cryptocurrency has a set cap of 21 million bitcoins. Many analysts note that this set cap makes bitcoin more desirable than other assets, even gold. That's because unlike with gold, there's no need to worry about a digital Gold Rush. A treasure trove of bitcoin won't ever be "discovered," causing the crypto's price to crash with an influx in supply. "There are potentially millions of times more gold underground than actually has been extracted," said Tom Lee, head of research at Fundstrat Global Advisors. Lee was chief equity strategist at J.P. Morgan before co-founding Fundstrat in 2014. Ben Yu, a blockchain expert living in San Francisco, says technological advances are also making gold easier to mine. "Today we mine gold at four times the rate that we did just 100 years ago," Yu said. So if bitcoin has scarcity, what about its utility? Many believe the cryptocurrency's utility lies in its potential to be a more efficient commodity than we already have. Proponents of bitcoin like it for a number of reasons. First, bitcoin is decentralized, meaning no government, bank or single person has control over it; it can't be toppled by corruption at the top. It's also trivially divisible, meaning you can buy a small item like a doughnut with it as easily as you can buy a house or even a mansion. And finally, the code it Continue reading >>
A Bubble? We Dont Even Know How To Value Bitcoin
A bubble? We dont even know how to value Bitcoin The Bitcoin market is only just maturing as an investment and the underlying value of the cryptocurrency is still unknown Bitcoin may be the best known cryptocurrency but it is also losing marketshare to other cryptocurrencies, such as Ethereum and Litecoin.Photograph: Dado Ruvic/Reuters A bubble? We dont even know how to value Bitcoin The Bitcoin market is only just maturing as an investment and the underlying value of the cryptocurrency is still unknown Alicia (Lucy) Cameron and Kelly Trinh for the Conversation Alicia (Lucy) Cameron is a senior research consultant art CSIRO and Kelly Trinh is a data scientist at CSIRO Bitcoin is a speculative mania according to the governor of the Reserve Bank of Australia. But its not so easy to say that Bitcoin is a bubble we dont know how to value it. Recent price rises ( close to $18,000 in the past three months) may be too great and cant continue. But the Bitcoin market is only just maturing as an investment and as a currency, and so it may still have room to grow. A bubble is when the price of an asset diverges from its fundamentals the aspects of an asset that investors use to value it . These could be the income that can be earned from a stock over time, a companys cash flow, the state of a countrys economy, or even the rent from property. Bitcoin buyer beware: US SEC warns 'extreme caution' over cryptocurrency investments But Bitcoin does not pay out profits (like shares) or rent (like property) and is not attached a national economy (like fiat currencies). This is part of the reason why it is hard to tell what the underlying value of Bitcoin is or should be. In the search for fundamentals some have suggested we should look at the supply of Bitcoins in the market (which is reg Continue reading >>
What Gave Bitcoin Its Value?
Those who use the work of Mises to challenge bitcoin should think again Many people who have never used bitcoin look at it with confusion. Why does this magic Internet money have any value at all? Its just some computer thing that someone made up. Consider the criticism of goldbugs, who have, for decades, pushed the idea that sound money must be backed by something real, hard, and independently valuable. Maybe it does. Lets take a closer look. Bitcoin first emerged as a possible competitor to national, government-managed money nearly six years ago. Satoshi Nakamotos white paper wasreleased October 31, 2008. The structure and language of this paper sent the message: This currency is for computer technicians, not economists nor political pundits. The paper's circulation was limited; novices who read it were mystified. But the lack of interest didnt stop history from moving forward. Two months later, those who were paying attention saw the emergence of the Genesis Block, the first group of bitcoins generated through Nakamotos concept of a distributed ledger that lived on any computer node in the world that wanted to host it. Here we are six years later and a single bitcoin trades at $500 and has been as high as $1,200 per coin.The currency is accepted by many thousands of institutions, both online and offline. Its payment system is very popular in poor countries without vast banking infrastructures but also in developed countries. And major institutionsincluding the Federal Reserve, the OECD, the World Bank, and major investment housesare paying respectful attention. Enthusiasts, who are found in every country, say that its exchange value will soar in the future because its supply is strictly limited and it provides a system vastly superior to government money. Bitcoin is Continue reading >>
Morgan Stanley On Bitcoin: 'the Value Would Be 0' - Business Insider
A vertical stack of three evenly spaced horizontal lines. * Copyright 2018 Business Insider Inc. All rights reserved. Registration on or use of this site constitutes acceptance of our The price of bitcoin as of 8.20 a.m. on December 24, after a very volatile week. Even after a rough week, bitcoin is trading at around $14,400. A recent research note from Morgan Stanley points out how hard it is to justify that valuation. The scarcity of people willing to accept it as a means of payment indicates that its actual value might be nothing. Morgan Stanley analyst James Faucette and his team sent a research note to clients a few days ago suggesting that the real value of bitcoin might be ... $0. That's zero dollars. (Bitcoin stood at around $14,400 at the time of writing.) The paper (titled "Bitcoin decrypted") did not give a price target for bitcoin. But in a section titled "Attempts to Value Bitcoin," Faucette described why it is so hard to ascribe value to the cryptocurrency. It's not like a currency, it's not like gold, and it has had difficulty scaling. He concluded: Very difficult question to answer, but some points to consider Can Bitcoin be valued like a currency? No. There is no interest rate associated with Bitcoin. Like digital gold? Maybe. Does not have any intrinsic use like gold has in electronics or jewelry. But investors appear to be ascribing some value to it. Is it a payment network? Yes but it is tough to scale and does not charge a transaction fee.* Bitcoin average daily trading volume of $3bn (last 30 days) vs $5.4 trillion in the FX market. Est. <$300mn in daily purchase volume vs. $17bn for Visa. Faucette backed his argument with this chart of online retailers who accept bitcoin, titled "Virtually no acceptance, and shrinking": This is possibly the sadde Continue reading >>
Bitcoin (btc) Price: The Market Value Of Cryptoassets Has Risen To A Near-record Quartz
Bitcoin prices are showing signs of stabilizing after a sharp selloff on Friday that cascaded through most digital assets, from litecoin to ethereum. Despite the short panic, the market value of the most popular cryptoassets, around $618 billion, is marching back toward its highest ever. Its near-impossible to know where the mania goes from here, but recent price swings have provided a narrative for everyone. Skeptics can say the selloff demonstrates bitcoins inherent instability, a tremor before the crypto bubble pops. Believers will point out that bitcoin has been through worse before going on to rally like mad. After all, the worlds best known and highest-valued cryptoasset started the year at around $1,000 and as of today (Dec. 27) is trading at about $15,820, up from $13,857 at the end of the day on Friday, according to Coindesk . The excitement that began with bitcoin has spread to its cousins: The market value of digital assets is steadily climbing towards last weeks record of about $648 billion, according to Coinmarketcap.com . Bitcoin now only accounts for about 45% of that valuea year ago it was closer to 90%followed by ethereum at 13%, and bitcoin cash, an offshoot, at 8%. While the boom in digital assets has mainly been an individual-retail-investor phenomenon, Wall Street is cautiously looking for ways to get in on the action. Bloomberg recently added pricing for litecoin, ethereum, and ripple to its terminal network, which professional traders rely on for financial data, according to Fortune. Global exchanges in ChicagoCME Group and Cboe Holdingshave also tried to capitalize on bitcoins success by starting derivatives linked to it. The newer digital assets like ethereum or litecoin could be an improvement on bitcoin, with faster processing speeds, for exa Continue reading >>
What Is Bitcoin's Elusive Intrinsic Value?
What Is Bitcoin's Elusive Intrinsic Value? I write and consult on digital transformation in the enterprise. Opinions expressed by Forbes Contributors are their own. As the market value of a single Bitcoin comes down off its lofty all-time maximum of over $2,800 to a still-bubbly $2,500 or so, aficionados and skeptics alike wonder whether the Bitcoin speculative bubble is finally popping, or whether the recent downturn is simply a profit-taking opportunity on the road to even loftier heights. And speculative bubble it certainly is, as a non-negotiable, software-constrained supply runs headlong into greater-fool demand. As even greater fools displace the ones before, all participants, foolish or not, increase their focus on the central question of Bitcoin: Adam Smiths invisible hand of supply and demand explain the market value of Bitcoin to be sure as market value is simply what someone is willing to pay, and plenty of fools are so willing. Strip away the drivers of extrinsic value, namely its greater-fool demand and its constrained supply, however, and what remains? The assets intrinsic value. Just as gold would retain its luster, malleability, and resistance to tarnishing, thus making it useful for numerous manufacturing and jewelry purposes regardless of its scarcity, one wonders what intrinsic value Bitcoin holds. You would think the answer would be obvious, but instead it is remarkably elusive. Never before in the history of commerce has a speculative bubble developed around an asset that had no clear intrinsic value. Even tulips the very symbol of a speculative bubble are flowers of remarkable beauty. Where, then, lies the intrinsic value of Bitcoin? Tulips: the global symbol of speculative bubbles Bitcoins Mysterious Missing Intrinsic Value Plenty of people both Continue reading >>
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 .  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  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  and Nick Szabo 's bit gold .   Hal Finney developed reusable proof of work (RPOW) using hashcash as its proof of work algorithm.  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.  There has been much speculation as to the identity of Satoshi Nakamoto with suspects including Wei Dai , Hal Finney and accompanying denials.   The possibility that Satoshi Nakamoto was a computer collective in the European financial sector has also been discussed.  On 18 August 2008, the domain name bitcoin.org was registered.  Later that year on October 31st, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System  was posted to a cryptography mailing list.  This paper detailed methods of using a peer-to-peer network to generate what was described as "a system for electronic tra Continue reading >>