FeedAboutBitcoin is a peer-to-peer pseudonymous digital currency."Peer-to-peer" (P2P) means that there is no central authority creating new money or clearing transactions.Instead, those tasks are managed collectively by the nodes... (more) 15.5k61.7k210Related TopicsInvesting in and using Bitcoins, a digital currency that can be transferred directly from person to person through the Internet, is a particularly bad idea because it is unstable and is being used as a speculative vehicle.That’s the consensus answer on question-and-answer site Quora.The currency is designed to remove the middle man in transactions.That can be a transaction provider like PayPal or a bank when someone makes a purchase with a credit or debit card.When someone makes a transaction, the Bitcoin is automatically transferred to the recipient through an encrypted transaction that ensures Bitcoins can’t be hacked or created artificially.New Bitcoins are added to the market through the “Bitcoin Mining” — a process where individuals run servers that handle Bitcoin transactions and get paid in Bitcoins for doing so.

The number of Bitcoins available to users is algorithmically limited — meaning the number of new Bitcoins introduced into the economy decreases over time and reaches a cap of somewhere around 21 million.That means that, similar to days on the stock market where there is low trading volume, smaller moves in the market are able to cause greater swings in the value of the Bitcoin.bitcoin farm malaysiaAn 8 percent swing in the value of the Bitcoin throughout the day is pretty typical.bitcoin youtube tamil“All of that volatility comes on an average Bitcoin volume of something like 20,000 per day.bitcoin difficulty trendIf I put in an order for $15,000 worth of Bitcoin right now, I’m pretty sure I could move the market between 5 percent and 10 percent to the upside,” Internet economist Adam Cohen said in a later post on Hacker News.bitcoin billionaire on pc

“It’s probably even worse to the downside.Call me a skeptic, but with that kind of easy price manipulation, I’m not quite ready to denominate my paycheck in Bitcoins yet.” There’s been incredible inflation in the value of the Bitcoin, which reached a price of somewhere around $28 before experiencing a “black Friday.” The Bitcoin then lost around a third of its value but has since climbed back up to around $22 per Bitcoin.ethereum chrome appThe 8 percent swing in the value of the Bitcoin is already nearly an order of magnitude more volatile than the typical stock market, which experiences daily shifts of around 1 percent on a more active day and less so on typical days.jasa bitcoinForeign exchange markets also experience a smaller amount of volatility.Cohen said the process of adding new Bitcoins to the market was a way to enrich early adopters and promote usage of the currency, but that puts new adopters and users of the currency at a disadvantage.

There are ways to exchange real-world dollars for Bitcoins at the current market price.As the price of the Bitcoin goes up over time, it’s less likely people will want to use their Bitcoins in transactions because they will become too valuable and they will just want to use them as an investment to generate a return.The whole Bitcoin ecosystem is also inevitably linked to computer systems.That means that any failure in any part of the Bitcoin creation and transaction process could create a crisis of faith in the currency and trigger a “run on the bank” of sorts, where Bitcoin owners try to convert their Bitcoins into real-world dollars before the value decreases any further, Cohen said.And there have been plenty of instances where even some of the best online services like Amazon’s cloud computing have failed for significant periods of time."Bitcoin" is a decentralized means of tracking and assigning wealth or economic value.Bitcoin is a software protocol, computer network, idea, community, movement, etc. A "bitcoin" is a unit of the currency that is moved around by the Bitcoin network.Central to Bitcoin is a public ledger, known as the Block Chain.

Roughly every 10 minutes, a new "block" is added to this chain or ledger.This ledger records all of the transaction that have taken place in the last 10 minutes, and what quantities of bitcoin currency are now held at different public addresses.A public address is a a 27 to 34 character string of uppercase, lowercase letters and the digits from 0 to 9.AKA base 58.Each public address has a corresponding private key.Whoever has this key, may spend the coins that are held at this private address.Private keys are 51 characters long in the same format as a public address.To spend an amount of bitcoin, you must use your private key to cryptographically sign the transaction, sending your bitcoin to another address.This message or transaction is then broadcast to the network, and the computers in the network begin working to write into the block chain (or public ledger) that your address no longer has the amount that was sent, but that that amount is now held  at the receiving address.Each new set of transaction is recorded on the block chain, every 10 minutes as mentioned above.All of the computers that are working to write new blocks to the block chain, are known as miners.These computers are all racing to solve a cryptographic puzzle, which si required to write the new block.The computer that solves the puzzle, and writes the new block receives an award of newly created bitcoin.The reward associated with each block began at 50 in 2009, is now 25, and will halve every 4 years, until an ultimate quantity of 21 million bitcoin are created.This transparency is a large part of the value created by Bitcoin, in that the rate of creation, and current amount in existence is known.That is my best attempt at translating what has taken me months to wrap my head around, and the implications go much further.

With respect to Shashank M Chanmal, I must also add this video, as it's the defacto teaching tool: What that, re-read my answer, read the wikipedia article (Bitcoin) and enjoy the journey.Bitcoin is digital money that you can transfer to another person without the need of a third party, like a bank.It can be thought of as a digital equivalent of cash - it's just one person transferring value to another person, no bank involved.In fact, Bitcoins are not issued by a bank or government, so an even more apt analogy than cash might therefore be gold.Ok, digital gold, got it.Why are people excited?1.Get rid of transaction costsBecause no third party is needed, there is nobody charging a transaction cost.Banks, card issuers and payment processors places a 1-5% transaction fee on that coffee you bought this morning, and everything else you buy.This is not very visible in everyday life, because it's almost always baked into the price of things, but if you start transferring money internationally with companies like Western Union, you realize that there is quite a bit of money in the business of transferring money.2.

Take currency power away from banks and governmentBanks and government have the legal and physical ability to create money.of how that works, but the main problem is that whenever money is created, it dilutes the value of everyone's money, which makes it a super-fast, completely silent, taxation.Sometimes, governments and banks use this power responsibly, but sometimes, they do not.Lately, there has been a lot of the latter, with the Financial crisis of 2007–08 caused by irresponsible lending, so a lot of people are starting to think that we probably are more reliant on banks and government that we want to be.An even more current example is Argentina, which has a 11% inflation (!)Bitcoin is getting a strong hold there: BitPagos Uses Merchant Processing To Bring Bitcoin To ArgentinaHow does it work?Before I go on, I'd like to point out that you probably don't know how your normal money works.Most people have no idea how money is transferred from one bank to another, or how it's created in the first place.

With that said, all Bitcoin transactions, from the beginning of time, are written down in an enourmous, public ledger.When you transfer money from your Bitcoin wallet to another person, you do that by writing this transaction down in the public ledger.Everyone is watching this ledger and has their own copies of it, and so they now know that there is less money in your wallet, and more money in a friend's wallet.So everyone knows how much money each wallet contains.This is where your money is stored, in this public ledger with millions of copies that everyone maintains together.They do, however, not know who owns that wallet - Bitcoin has no notion of identity.So what's preventing another person from transferring money from my wallet to their own?This is where cryptography comes in.When your Bitcoin wallet is generated, it's given to you in two parts.One public part, an address, that you give to other people so that they know where to send you money, and a secret part, a key.The key is used to "sign" transactions.

It takes the amount, the sender address, receiver address, and the key, jumbles it together with math, and out comes a signature, that you put in the ledger along with the transactions.Due to how cryptography works, other people can mathematically verify that the person that generated this signature for this transaction must indeed have the key for this wallet./c/mpjmevideos What is Bitcoin?Bitcoin is the first global, decentralized currency that allows you to send money from one person to another without involving a third party broker, such as a bank.You only need your computer to make transactions because Bitcoin is fundamentally software.As a decentralized currency, Bitcoin isn’t controlled by anyone.It’s open so that anyone can benefit from it.You might think that the lack of control could mean chaos, but that’s not true at all.That’s because Blockchain, the technology behind Bitcoin is one of the most accurate and secure systems ever created.How Does Bitcoin Work?A blockchain is a ledger that keeps records of digital transactions.

Instead of having a central administrator, like a bank or the government, blockchain organizes data in batches (What is a blockchain, and why is it growing in popularity?)These data batches use cryptographic validation to link themselves together.In other words, each block identifies and references the previous block by a hash value (Hash function - Wikipedia), forming an unbroken chain.Blockchain solves two of the most challenging problems of digital transactions (There is a 'game changer' technology on Wall Street and people keep confusing it with bitcoin): controlling the information and avoiding duplication.When a purchase is carried out, the ledger records it and sends it out to the entire network.Computers all over the world then compete to confirm the operation by solving complex math equations.The first to figure out the answer and validate the block receives a reward in Bitcoins (this process is called mining.)The validated block is timestamped and added to a chain in chronological order.

The entire chain is continually updated so that it’s always an accurate representation of who owns what at any given time.Is it Legal?The legality of Bitcoin depends on where you’re located.Bitcoin was legalized as a formal method of payment in Japan this year, and India might be next.In most countries, however, it somewhat operates in a gray zone, with no official ban or approval of Bitcoin.Who’s Behind it?The founder of Bitcoin is Satoshi Nakamoto, an anonymous online alias for a forum poster.The founder remains unknown, and no one truly knows who the actual founder is.At the moment, Bitcoin is owned by the community as a whole, as it is an open source initiative, with no single owner behind it.It is a community movement.Shameless Plug - I filmed an in-depth video and article on investing in Bitcoin for beginners[1] for anyone interested in profiting from BitcoinFootnotes[1] Investing in Bitcoin, Ethereum and Altcoins Could Make You a MillionaireBitcoin miners listen for transactions that are broadcast to the network.

As they receive the transaction, they verify that the transaction is valid and that all inputs to a transaction are completely used.For example if Alice wanted to send Bob 1.5BTC she would need to choose outputs from a previous transaction which total more than 1.5BTC.And define a transaction that has a 1.5BTC output to Bob and the remainder back to herself (any remaining BTC that does not have an output is claimed by the miner as a transaction fee).If any of the inputs are already used or the transaction is in some other way invalid, the miner will discard it.If everything checks out the miner will probably include the transaction in the block it is mining.Miners then group those transactions into pairs and hash them together (including one special transaction called the coinbase transaction).The coinbase transaction is a transaction that sends 25BTC (currently) to the miner as a reward for processing this block.Then they hash pairs of hashes together until they end up with a single hash value for the entire block of transactions.

This structure is called a merkle tree and it is proof of every transaction in the block.The last hash value is called the merkle root.The miner hashes together the merkle root, the hash of the previous block in the blockchain, and a nonce.The miners will actually try billions of nonces to try to find the one that makes the hash of the current block they are mining start with a certain number of zeros (depending on the current difficulty).For most merkle roots there does not exist a nonce that meets the difficulty, so miners will go back and alter the merkle tree by adding transactions or fudging with the coinbase transaction.Changing the tree means that there will be a new merkle root and they can try all the possible nonces again to try to find a solution.If they find a nonce that creates a block hash which meets the difficulty, then they broadcast it to the network and it is included in the blockchain.They collect their reward because the coinbase transaction (which created 25BTC and put it in their wallet) is now committed to the blockchain.Sometimes two miners find a solution at roughly the same time.