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27 March 2014
All you wanted to know about BITCOINS!!!
Bitcoin is a mystery to most people.No they are not
any ordinary coins which have been floated in the market.it is rightly said
that the technology is growing rampant no wonder there has been a birth of
digital currency- BITCOINS. Bitcoin isn’t just a currency, like dollars or euros
or yen. It’s a way of making payments, like PayPal or the Visa credit card
network. It lets you hold money, but it also lets you spend it and trade it and
move it from place to place, almost as cheaply and easily as you’d send an
email.the originator of bitcoins is Satoshi Nakamoto .Bitcoin is an
experimental, decentralized digital currency that enables instant
payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer
technology to operate with no central authority: managing transactions and
issuing money are carried out collectively by the network.Users
send payments by broadcasting digitally signed
messages to their network peers. All transactions are verified, time stamped,
and recorded by specialized computers into a shared public database
called the block chain.
The operators of these computers, known as "miners",
are rewarded with transaction fees and newly minted bitcoins.
How does one acquire bitcoins?
for goods or services.
bitcoins at a Bitcoin exchange.
bitcoins with someone near you.
bitcoins through competitive mining.
While it may be possible to find individuals who
wish to sell bitcoins in exchange for a credit card or PayPal payment, most
exchanges do not allow funding via these payment methods. This is due to cases
where someone buys bitcoins with PayPal, and then reverses their half of the
transaction. This is commonly referred to as a chargeback
BITCOINS are not regulated by any agency .In india
RBI issued a warning
that it will not regulate any Virtual Currency including Bitcoin in India and
warned people who were dealing with the currency in India of the risks
involved, saying that they’re exposing them to financial, legal, operational
and security related risk.bitcoins are notlegal so there is a full potential to
misuse bitcoins for illegal purpose.
Bitcoin is unique in that only 21 million bitcoins
will ever be created.However, this will never be a limitation because bitcoins
can be divided up to 8 decimal places ( 0.000 000 01 BTC ) and potentially even
smaller units if that is ever required in the future.The price of a bitcoin
topped $900 last week, an enormous surge in value that arrived amidst
Congressional hearings where top U.S. financial regulators took a surprisingly
rosy view ofdigital currency. Just 10 months ago, a bitcoin sold for a measly
$13 digital currency.
How to use bitcoins?
If you own some bitcoins, what you really own is a
private cryptography key that’s associated with an address on the internet.f
you want to send your bitcoins to someone else, you need your address and their
address — but you also need your private cryptography key. This is an even more
complicated string that you use to authorize a payment.
the ordinary people who use this network — the people who do the buying and the
selling and the transferring — managing addresses and keys can be a bit of a
hassle. But there are many different types of programs — called wallets — that
keep track of these numbers for you. You can install a wallet on your computer
or your mobile phone, or use one that sits on a website.
these wallets, you can easily send and receive bitcoins via the net. You can,
say, buy a pizza on a site that’s set up to take bitcoin payments. You can
donate money to a church. You can even pay for plastic surgery. The number of
online merchants accepting bitcoins grows with each passing day.
More than $1.5 billion worth of bitcoins are
currently in circulation around the world, with millions of transactions
occurring daily. Needless to say, the popularity and usage of Bitcoin is
picking up very quickly as more and more businesses and individuals are
becoming aware of its benefits and advantages over traditional currencies.
How are bitcoins priced?
Bitcoins are like any other currency: they
fluctuate in value relative to other currencies. Similar to how the rupee's
valuation swung wildly against the US dollar this year, bitcoins have had
drastic movements in price as well.
The value of a bitcoin is constantly changing, and
there is no centralised exchange for it. Think of it this way: each time a
bitcoin changes ownership from seller to buyer, the two parties need to agree
on its price. There is no 'fixed' price. Usually, it's the seller's
responsibility to give a fair price to the buyer based on what rate bitcoins
are being traded in elsewhere. The difference between bitcoins and other
currencies is that there is no centralised bank that prints the currency and
sets relative values. Through transactions, the value of bitcoin fluctuates through
supply and demand
The greatest advantage, however, is that all
necessary information is public and transparent. Without revealing the
identities of the buyer and seller, the entire bitcoin network is made aware of
each and every transaction. This gives a tremendous amount of comfort to both
parties of the transaction.
As Bitcoin gains popularity, governments are slowly
but surely starting to take stances against/for it.The government of China took
it one step further by barring financial institutions and payment institutions
from accepting bitcoins as a form of payment. Governments are cracking down on
"black markets" that accept bitcoins as a form of payment.
It will be difficult for governments to 'shut down'
Bitcoin. In fact, there are talks that virtual currencies are the wave of the
future to do their inherent associations of being decentralized, transparent,
secure and hassle free.
We can only expect Bitcoin's meteoric rise in
popularity to continue.