Abney Associates: Understanding Bitcoin

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Dec 3, 2013 (3 years and 8 months ago)

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Abney Associates: Understanding Bitcoin
http://abneyassociates.org/2013/04/09/understanding-bitcoin/
Bitcoin is a form of Internet money that is immensely trendy and greatly appreciated

means of buying and selling on line. And this is a currency that barely anybody understands.

Various companies exclusively accept Bitcoins. The truth because of the recent banking

instability in Cyprus it became so enormous that the worth of “all outstanding Bitcoins” just

hit $1 billion.
So what is this bitcoin? Bitcoin (sign: BTC) is a decentralized digital currency based on

an open source, peer-to-peer internet protocol. It was introduced by a pseudonymous

developer named Satoshi Nakamoto in 2009.
Bitcoins can be exchanged through a computer or smartphone locally or internationally

without an intermediate financial institution. In trade, one bitcoin is subdivided into 100

million smaller units called satoshis, defined by eight decimal points.
Bitcoin is not managed like typical currencies: it has no central bank or central

organization. Instead, it relies on an internet-based peer-to-peer network. The money supply

is automated and given to servers or “bitcoin miners” that confirm bitcoin transactions as

they add them to a decentralized and archived transaction log approximately every 10

minutes.
Who would have thought that a virtual currency with no physical manifestation all of a

sudden worth $1 billion in U.S. currency.
Bitcoin is gaining traction plus attention even if it does not hold a candle to the $1.13

trillion in Federal Reserve Notes in circulation.
What people like about Bitcoin is it removes the middleman from online transfers of

money. We are all concern about those middlemen such as central banks, or the Federal

Reserve or credit card companies. Bitcoin also permits for more anonymity than every other

mode of online payment. Though it’s hard to pinpoint just how unidentified Bitcoin really is,

this fact manipulates how the currency is used. One controversial Reddit group that seeks to

“protect” men from feminists asks for donations in Bitcoin particularly to guard the

characters of all involved, although some secretive purchases made online using Bitcoin are

justified,.
Two main ways to acquire Bitcoins: You can buy them or mine for them, don’t go back

you red it right, you can mine it. Just like any other type of money the Bitcoins and U.S.

dollars exchange rate also fluctuates. The current exchange rate as of Friday afternoon is 1

Bitcoin to $88.811. Similar with conventional currencies, it’s possible to make money just by

buying and selling Bitcoins as exchange rates change.
It’s a outlandish procedure as for mining for Bitcoins. According to Bitcoin’s official

website, mining is basically making your computer run a program to “do mathematical

calculations for the Bitcoin network to confirm transactions and increase security.”
Your chances of receiving any Bitcoins from mining on your own are thin, other than

mining takes up a lot of space on your computer. A lot of people adhere what are known as

mining pools to compensate. People can combine their computing power to crack the codes

together, splitting the Bitcoin profits among themselves in a pool. And this is the primer of

Bitcoin.