What is bitcoin?
A bitcoin is a digital currency that can be only used for online transactions. It is also known as Cryptocurrency as it is generated using software based on complex field of mathematics called cryptography.
Transacting with bitcoin
In order to transact with bitcoin, you need to set up a bitcoin wallet, which is equivalent of a bank account. This is held either on a mobile phone or on computer. It allows you to receive, store and send bitcoins anywhere in the virtual world. Different countries of the world has different policies when it comes to trading with bitcoins. In India, Central government prohibits the use of bitcoin for transactions. In other words, you can not use bitcoin to buy or sell anything in India.
Growth of bitcoin
Bitcoin is a online 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 were 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.
Anonymity and future of bitcoin
Though each bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed – only their wallet IDs. While that keeps bitcoin users’ transactions private, it also lets them buy or sell anything without easily tracing it back to them. That’s why it has become the currency of choice for people online buying drugs or other illicit activities.
No one knows what will become of bitcoin. It is mostly unregulated, but some countries like Japan, China and Australia have begun weighing regulations. Governments are concerned about taxation and their lack of control over the currency.