What Are BitCoins?
Bitcoin is a “digital currency” or a “cryptocurrency”. It is designed to work as a medium of exchange using cryptography to secure the transactions. Bitcoin also control the creation of additional units of the currency. It was first invented by Satoshi Nakamoto in 2009 on white paper. The identity of Nakamoto remains unknown, though many have claimed to know it. It involves peer-to-peer networking, where the transactions takes place directly between users without the use of a centralized administrative system. The transactions get verified through network nodes and are recorded in a public distributed ledger called the blockchain.
How to Buy or Sell a Bitcoin?
Bitcoins can be exchanged through both online and offline mode. According to a study in 2013, participants in online exchange mode has a risk of failed transaction even in certain cases it had been observed that they take client’s bitcoins. Through offline modes, one can purchase bitcoins directly from an individual or from any Bitcoin ATM. Unlike traditional ATMs, Bitcoin ATMs or Bitcoin kiosks are machines that allows insertion of cash in exchange for bitcoins.
Breaking down a Bitcoin
Bitcoin is a cryptocurrency or a digital currency secured with a public and private “keys”, which consists of long strings of alphabetical and numerical values linked through a mathematical encryption algorithm to protect them. Public keys are like a normal bank account number that can be published, while private Keys are the password protecting secret pins (Just like ATM Pins).
How Does Bitcoin Work?
Bitcoin is a digital currency that involves peer-to-peer networking, where the transactions takes place directly between users without the use of a centralized administrative system. Those individuals or companies governing the Bitcoin network are known as “miners”.
New bitcoin is being released to the miners at a fixed, but at a declining rate, such that the total supply of bitcoins approaches 21 million. One bitcoin is divisible to eight decimal places (100 millionth of one bitcoin), and this smallest unit is referred to as a Satoshi representing 0.00000001 bitcoin, one hundred millionth of a bitcoin.