What are Bitcoins?

Bitcoin is a payment system invented by Satoshi Nakamoto. He introduced bitcoins in 2008 to a cryptography mailing list and released it as open-source software.

Anything can be shared through internet to multiple users. So the problem is that implementing a digital payment system which makes sure that nobody spends the same money (share the same bitcoin) more than once is difficult. Therefore supervision is done by a trusted central authority (like PayPal) that verifies all of the transactions. The core aspect that makes Bitcoin special is that it uses a general agreement in a massive peer-to-peer network to verify the transactions. This result in a system where payments are non-reversible, accounts cannot be frozen, and transaction fees are much lower.

Mining is the term used for running a sequence of calculations on a computer to verify the transactions that take place in the Bitcoin network. This is computationally intensive and in fact every 10 minutes, a user whose updates to the log (log of transactions) have been approved by the network is rewarded a fixed number (currently 25) of new Bitcoins. This has induced  Bitcoin fans to build efficient computers, or even to hack other’s computers, for Bitcoin mining.The more you do more bitcoins will be awarded to you.

The Bitcoin Currency is decentralized. Bitcoin tumbling, also referred to as Bitcoin mixing or Bitcoin laundering, means using a third party service to cut the connection between a Bitcoin address sending coins and the receiver address.  The Bitcoin block chain is a public record (ledger) that records every transaction, mixing coins is crucial for anyone who doesn’t want the entire world to know exactly where they send and store their BTC, or from where they receive it. The flexibility and feasibility of the system is so appealing to those with more crooked purposes in mind. This makes Bitcoin an attractive currency in Dark Web and in international transactions, without troubling with bank charges or exchange rates. For example web hosting, gambling, purchasing weapons and drugs, gambling, buying stolen art, and more are using Bitcoins.

Read more: http://suitpossum.blogspot.in/2013/04/how-to-explain-bitcoin-to-your.html


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