TECHNOLOGY

What is BitCoin in Today’s Context

Bitcoins have been around for over eight years and their price has observed dramatic fluctuations over the years.  In the beginning of 2016, one bitcoin was valued at $434 and as of Dec 2016 it is hovering around $780.  Bitcoin hit an all-time peak on Nov 29, 2013, with its value at $1,137.

Global cryptocurrency has grown rapidly in the year 2016.  As of mid-June, the value of all blockchain-based currencies in circulation was pegged at $14.37bn. And the total value of active bitcoins as of July 1, 2016 was $10 bn.

What does this high market capitalization of popular cryptocurrency bitcoins signify? For sure, bitcoins are becoming popular source of investment despite its volatility. The following blog will help you to understand bitcoins, what drives people to invest in bitcoins, some myths regarding them and finally what future they hold.

 

What is a bitcoin?

Bitcoin is a cryptocurrency introduced in 2009 by unidentified programmers under the name of Satoshi Nakamoto.  Cryptocurrency is a digital currency where encryption techniques are used to regulate the generation of currency units and verify the transfer of funds.

Bitcoin is a decentralized digital currency.  It means unlike physical currencies, bitcoins don’t fall under the ambit of regulatory authority and operate as an independent virtual currency. And your digital account can’t be controlled by banks or any other legal agencies.

Bitcoins are transferred from one computer to another with a verified transaction. Bitcoins can be used anywhere across the world for making online transactions like purchasing video games, gifts, books, servers, etc.

 

How does it work?

Bitcoins are generated all over the internet by running a free application called a bitcoin miner. Mining requires some amount of hard work for generating each block of coin. Bitcoins are automatically transferred to miners’ account after verification. The total number of bitcoins will always be predicable and limited because the system is designed in such a manner that it can’t exceed a limit of 21 million units.

Bitcoins are stored anonymously in the network. They run on open-source software where anyone can review the code.  There are many currency exchanges that can trade your bitcoins for dollars and euros.  One of the most popular digital asset exchange companies is Coinbase. Coinbase facilitates buying and selling of bitcoins.

Bitcoins transactions are backed by blockchain technology. Blockchain is a public ledger of all transactions in the Bitcoin network. It allows you to navigate the bitcoin blockchain.

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