What is bitcoin?
Bitcoin is an open source digitally distributed crypto-currency.
Basically it's a currency like any other only it has the particularity of not being backed gy any government yet, and is already gaining somewhat of acceptance amongst customers and businesses as a an alternative to traditional currency.
It works with wallets, people own wallets to which they can transfer funds from and to.
It works with wallets, people own wallets to which they can transfer funds from and to.
Wikipedia: "Transactions transfer bitcoins, the unit of currency, between Bitcoin addresses derived from cryptographic public keys. To spend the funds associated with an address, a user must broadcast a payment message digitally signed with the associated private key."
What that is saying is that there is a public address/key. This address is the public digital signature of your wallet, this is where others will be sending you money to. And there is a private key, which should not be shared, (or only be shared by people amongst few) with the ownership of the wallet, as it allows you to own and transfer the content of the wallet. Both those keys constitute your wallet.
A transaction that you generate will take a little time to propagate amongst the different nodes of the distributed network.
Bitcoins have been operational since 2009, which means that since 2009 mining (the generation of the currency units, but I will get back to mining later as it is an interesting but complex operation of itself) and trading has begun.
Bitcoin has quickly been adopted by weapons and drug dealers, (which in my opinion is the best way to validate the value of the currency, as they are risking their lives on the real value of the currency). Shortly after the gambling industry picked it up, as you know it is more efficient at large as well as small transactions.
From it's origins until 2012, bitcoin remained an underground currency adopted by dodgy industries and very technical geeks, but by the end of 2012 and through 2013, bitcoin has gained a lot of media traction for the good and the bad and a lot of investments from the most prominent VC firms. The two noticeable companies attracting high profile investment firms are Ripple, backed by Google venture and that allows anyone to ope a financ and Coinbase.
On top of that, in 2013, many interesting events have happened to legitimize bitcoin:
What that is saying is that there is a public address/key. This address is the public digital signature of your wallet, this is where others will be sending you money to. And there is a private key, which should not be shared, (or only be shared by people amongst few) with the ownership of the wallet, as it allows you to own and transfer the content of the wallet. Both those keys constitute your wallet.
A transaction that you generate will take a little time to propagate amongst the different nodes of the distributed network.
Historically
The first paper published about bitcoin was released in 2008 by Satoshi Nakamoto who is the alias behind which have hidden the creator(s) of this crypto-currency.Bitcoins have been operational since 2009, which means that since 2009 mining (the generation of the currency units, but I will get back to mining later as it is an interesting but complex operation of itself) and trading has begun.
Bitcoin has quickly been adopted by weapons and drug dealers, (which in my opinion is the best way to validate the value of the currency, as they are risking their lives on the real value of the currency). Shortly after the gambling industry picked it up, as you know it is more efficient at large as well as small transactions.
From it's origins until 2012, bitcoin remained an underground currency adopted by dodgy industries and very technical geeks, but by the end of 2012 and through 2013, bitcoin has gained a lot of media traction for the good and the bad and a lot of investments from the most prominent VC firms. The two noticeable companies attracting high profile investment firms are Ripple, backed by Google venture and that allows anyone to ope a financ and Coinbase.
On top of that, in 2013, many interesting events have happened to legitimize bitcoin:
- All year long there has been notorious companies investing in businesses related to bitcoin technology
- Large investments into bitcoin early in the year due to the Cyprus banking crisis
- In March 2013 the US Financial Crimes Enforcement Network (FinCEN) established regulatory guidelines for "decentralized virtual currencies"
- China’s main search engine Baidu, that one of its subsidiary services now accepts the virtual currency then later in December, China’s central bank barred banks from handling bitcoin transactions, ie giving prices in bitcoin, buying or selling bitcoin and insuring bitcoin linked products.
- In August, German finance ministry recognizes bitcoin as "private money", meaning it is accepted as a "unit of account", meaning it is can be used for tax and trading purposes in the country
- In November, first congressional hearing in the Senate on virtual currencies senators and agreed it was a "legitimate" financial service and has the potential to promote more efficient global commerce.
- In November, New York state’s financial regulator, Benjamin M. Lawsky, said that he would consider licensing businesses that conduct transactions in crypto-currencies.
- Other facts in 2013: Malaysia and Indonesia are among the nations in Asia that have welcomed Bitcoin usage and now enjoy booming bitcoin exchanges. Thailand banned the currency but it is technically hard to track and regulate.
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