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Bitcoin – Introduction

Bitcoin – Introduction

Bitcoin is a digital currency which creation is established -and therefore its operation too- on the science of cryptography, an intersection of mathematics and computer engineering. That’s why you may find the term crypto-currency written in regard to bitcoin’s gist.

It was initially and theoretically introduced in 2008 by Satoshi Nakamoto, however this is not considered as the real name of the person who brought it up or even a group of people is alleged to be behind this concept, by others. In 2009, the first Bitcoin client is a reality along with the issue of the first bitcoins.

Bitcoin has decentralized structure which means that the system’s operation depends on a network of computer miners that determine the validity of transactions between the users, taking as reward a part of the fees of every transaction made as well as a proportion of the newly created Bitcoins circulating the network.

The allocation of the newly created Bitcoins has been set on a 10 minute frequency and 25 BTC quantity, meaning that 25 Bitcoins have been being generated every 10 minutes by the system (miners). The supply of Bitcoins won’t be infinite and it’s planned to be stopped when the number reaches the amount of 21 million Bitcoins

The currency became rapidly popular especially this year when the people realized that their money are not totally secured by storing them in a bank account (Cypriot Bank Run), hence  the value of Bitcoin was raised exponentially to $260. The exchange rates are determined by major exchangers that provide an online platform for such arrangements. So you can exchange Bitcoins with all the major fiat currencies such as Euro, US Dollar, British Pound.

Some analysts deny to consider Bitcoin as regular currency because there is no central authority which controls it (Central Bank) and also the fluctuations upon the value of Bitcoin are frequent and colossal comparing it to the ones of every other fiat currency. It’s classified as commodity like gold by them but personally I don’t find any valid ground for this grouping, considering the virtual existence and use of this entity.

Bitcoin is not the only crypto-currency but certainly the most famous, however it is still not highly usable. But then again and as the time goes, a broader acceptance of Bitcoin by online merchants is expected. With that said, a rise on the demand for Bitcoins is estimated as well.

At this point we just mentioned the basic info in regards to bitcoins and we are stopping here. How to get started, ways of earning, names, links and related info will follow very soon. Till then..

Bye!

5 Comments

  1. Bitcoin has also seen another surge in popularity since Edward Snowden’s revelations about PRISM etc. People need to be able to trade quickly and anonymously online – not because everyone online is a criminal, but because privacy is a basic human right that needs to be upheld. Bitcoin puts the power back in peoples hands, where it rightly belongs.

  2. This was a very good introduction to bitcoin and its place in digital currency history. My only concern is with the Dept of Justice. How long do you think it’ll be before they attempt to extend their ridiculously long tentacles and apply their antiquated laws to Bitcoin? Look at what they’ve done to Liberty Reserves for example?

    • After the Dept. Of Justice shut down LR, a lot of concern over Bitcoin was created. Many analysts estimated that the Bitcoin network comes next in the list. I think that we’re talking about different entities. On one hand we have an online wallet like LR was and on the other hand we have an alternative currency, a software. Only indirect hits i can expect and all of them will have micro-monetary goal rather than any other output related to justice.

  3. Thank you for this excellent bitcoin introduction! Nothing more to say. Although operating with currencies and online earnings for years, I never put my attention on it.

    I can’t wait for the rest of the texts and I really hope they are coming soon. :)

    • Patience is virtue. Thanks for your kindness. :)

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