It’s not a true money, it’s a “cryptocurrency,” a digital payment mechanism that a number of people worldwide generate (“mined”). Fast, anywhere, free or very cheap peer-to-peer transfers can be performed. For more details see this.
Bitcoin was founded in 2009 by Satoshi Nakamoto (a popular pseudonym), a software developer who developed and implemented the algorithm after decades of work into cryptography. His true identity appears to be enigmatic.
Such money is not backed by actual resources (such as gold or silver), it is exchanged electronically and is considered a asset in itself.
Bitcoin is an open software tool that anyone who is a customer will use. All you need to do is have an email address, access to the Internet and start capital.
From where is it coming?
Bitcoin is explored by a distributed cloud of software users, the network solves some mathematical proof and searchs for a specific data sequence (“block”) which produces a specific pattern when the BTC algors are used. A match allows a bitcoin. It’s time intensive and complicated.
Just 21 million Bitcoins (about 11 million are in circulation) would ever be produced. It is extremely challenging to manage and supply mining activities due to the math problems solved by the Network Computers.
All transaction through cryptography is verified by this network.
What is the role of bitcoin?
Internet users are passed on a network to each other digital assets (bits). It is not an electronic bank; rather, Bitcoin is represented as a distributed ledger throughout the Web. The Bitcoin is bought by consumers in cash or by selling a Bitcoin good or service. This digital money is used through Bitcoin wallets. Users will offer their Bitcoin to anyone else who needs it out of this interactive king. All in the universe should do this.
Smartphone apps are available to perform smartphone Bitcoin transfers and Bitcoin connects the World.
What is the worth of Bitcoin?
Bitcoin is not a financial entity, nor is it controlled; it is totally decentralized. In comparison to real currency, governments or banks can not devaluate it.
On the opposite, the appeal of Bitcoin depends on its adoption as a means of payment between users and the reality that its distribution is low. The foreign currency prices fluctuate due to consumer demand, availability and speculation; with more individuals building wallets, storing and investing bitcoins, plus companies embrace it, the value of bitcoin should grow. Banks are attempting to measure Bitcoin today, and several news pages predict that the Bitcoin price would contribute to thousands of dollars in 2014.
What are the advantages?
Consumers and merchants are gained from utilizing this payment method.
- Quick transfers-Bitcoin is immediately exchanged across the network.
- No costs / small costs — Bitcoin can be used free or rather small payments unlike credit cards. No authorisations (and fees) are required without the centralized entity as a middle party. It raises revenue and income margins.
- Removes the possibility of fraud – Only the owner of the Bitcoin may submit payment to the intended beneficiary who is the only one to receive the payment. The network understands that the switch has taken place and transfers are checked. It is relevant for internet marketers who often need credit card processors to determine if the fee is illegal or how customers incur the high expense of credit card repayment.
- data is secure – the Internet is not necessarily a protected environment for private info, as we have learned with recent attacks on payment networks from domestic merchants. Users don’t offer away sensitive details for Bitcoin.