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What is Bitcoin

 

Digital Currency Bitcoin

Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator. The network is peer-to-peer and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009.

Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. Research produced by the University of Cambridge estimates that in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.

Bitcoin was invented by an unknown person (or possibly a group of people) using the name Satoshi Nakamoto and was released as open-source software in 2009. The idea was to create a decentralized electronic cash system that is completely independent of a central authority. Nakamoto, having cultivated the concept and technology way back in 2009, thereafter turned over the innovation including its source code and domains to the Bitcoin community and is yet to be heard from again.

Since then, Bitcoin has successfully evolved into what its pioneers intended it to be—a digital currency where transactions are independent of a middle man. This means there are no banks or governments, and no exorbitant fees for getting in the way of users, enjoying the full value of their money. Bitcoins are now widely circulated on the blockchain and are used to purchase merchandise and pay for services. An increasing number of businesses are incorporating the digital currency into their payment mix, especially because Bitcoins make international payments cheap and easy to process, owing to its decentralized, unregulated nature.

Bitcoin functions much like traditional currency, only it exists and is created electronically. It is sent between users without a central authority or a bank getting in the way. It is a growing asset class that is increasing in both value and acceptance, especially because of its pseudo-anonymous characteristic, that allows users to maintain their privacy.

However, Bitcoin’s anonymity isn’t perfect, as transactions are recorded through a distributed network known as the blockchain, which makes it possible for an interested party to track down owners and users of the digital currency. Fortunately, services like Ghost Mixer can be used to obscure Bitcoin transaction histories, making it harder for third parties to track down users’ spending habits and funding sources.