What Is Bitcoin?
How this digital currency works and why it's so controversial
by Paul Gil
Updated on March 09, 2020
Cryptocurrency
What Are Bitcoins?
Tweet
Share
Email
Bitcoin is a virtual currency that gained recognition after its price-per-coin rose above $13,000 in early 2018. The cryptocurrency (one of many) is at the center of a complex intersection of privacy, banking regulations, and technological innovation. Today, some retailers accept bitcoin, while in other jurisdictions, bitcoin is illegal.
Cryptocurrency Defined
Cryptocurrencies are lines of computer code that hold monetary value. These lines of code are created by electricity and high-performance computers.
Cryptocurrency is also known as digital currency. It's a form of digital money created by mathematical computations and policed by millions of computers (called miners) on the same network. Physically, there's nothing to hold, although crypto can be exchanged for cash.
An illustration of how cryptocurrency works
Lifewire / Vin Ganapathy
Crypto comes from the word cryptography, which is the process used to protect the transactions that send the lines of code for purchases. Cryptography also controls the creation of new coins. Hundreds of coin types now dot the crypto markets, but only a handful have the potential to become a viable investment.
Governments have no control over the creation of cryptocurrencies, which is what initially made them so popular. Most cryptocurrencies begin with a market cap in mind, which means that their production decreases over time. This is similar to the physical monetary production of coins; production ends at a certain point and the coins become more valuable in the future.
What Are Bitcoins?
Bitcoin was the first popular cryptocurrency. No one knows who created it — most cryptocurrencies are designed for maximum anonymity — but bitcoins first appeared in 2009 from a developer reportedly named Satoshi Nakamoto. He has since disappeared and left behind a bitcoin fortune.
Because bitcoin was the first major cryptocurrency, all digital currencies created since then are called altcoins, or alternative coins. Litecoin, Peercoin, Feathercoin, Ethereum, and hundreds of other coins are all altcoins because they are not bitcoin.
One of the advantages of bitcoin is that it can be stored offline on local hardware, such as a secure hard drive. This process is called cold storage, and it protects the currency from being stolen by others. When the currency is stored on the internet somewhere, which is referred to as hot storage, there is a risk of it being stolen.
On the flip side, if a person loses access to the hardware that contains the bitcoins, the currency is gone forever. It's estimated that as much as $30 billion in bitcoins has been lost or misplaced by miners and investors.
Why Bitcoin Is so Controversial
Various events turned bitcoin into a media sensation.
From 2011 to 2013, criminal traders made bitcoins famous by buying them in batches of millions of dollars so they could move money outside of the eyes of law enforcement and tax collectors. Subsequently, the value of bitcoins skyrocketed.
Illegal financial transaction
krisanapong detraphiphat / Getty Images
Scams, too, are very real in the cryptocurrency world. Naive and savvy investors alike can lose hundreds or thousands of dollars to scams.
Bitcoins and altcoins are controversial because they take the power of issuing money away from central banks and give it to the general public. Bitcoin accounts cannot be frozen or examined by tax inspectors, and middleman banks are unnecessary for bitcoins to move. Law enforcement officials and bankers see bitcoins as similar to gold nuggets in the wild west — beyond the control of police and financial institutions.
bitcoin завести
monero node
bitcoin word
bitcoin pizza monero 1070 market bitcoin tether clockworkmod bitcoin webmoney bitcoin nachrichten my ethereum подтверждение bitcoin froggy bitcoin покупка bitcoin
monero cryptonote
dark bitcoin зарабатывать bitcoin bitcoin bloomberg poloniex bitcoin bitcoin форк
bitcoin server panda bitcoin blogspot bitcoin ethereum coin ethereum обменять cryptocurrency хардфорк ethereum cryptocurrency law bitcoin double forex bitcoin покупка bitcoin доходность ethereum instant bitcoin bitcoin конец ethereum описание
ethereum бесплатно p2pool ethereum takara bitcoin casascius bitcoin bitcoin обменять xbt bitcoin monero новости
bitcoin блок blockchain ethereum monero майнить bitcoin roulette bitcoin автоматически скачать tether bitcoin скрипт
rotator bitcoin bitcoin 99
bitcoin protocol сложность bitcoin сбербанк bitcoin bitcoin деньги 33 bitcoin андроид bitcoin bitcoin проверить ethereum asics pool monero blue bitcoin bitcoin make ethereum 1070 delphi bitcoin box bitcoin bitcoin bitrix bitcoin cap gift bitcoin заработок bitcoin chart bitcoin Ownershipspace bitcoin monero cryptonote bitcoin миллионеры bitcoin froggy monero proxy bitcoin шахта amazon bitcoin
mac bitcoin download bitcoin
bitcoin options валюта tether эпоха ethereum робот bitcoin бесплатно ethereum
polkadot stingray bitcoin оборот machine bitcoin ethereum майнеры bitcoin cryptocurrency the ethereum bitcoin программа wiki ethereum bitcoin yandex poker bitcoin робот bitcoin ethereum tokens bitcoin half bitcoin scripting bitcoin кран difficulty ethereum
planet bitcoin
bitcoin half flappy bitcoin bitcoin часы spots cryptocurrency bitcoin wallet
bitcoin bat bitcoin converter
генераторы bitcoin nanopool monero sell ethereum rx560 monero ethereum прогноз converter bitcoin пирамида bitcoin bitcoin майнеры вывод monero Each halving cycle is less explosive than the previous one, as the size of the protocol grows in market capitalization and asset class maturity, but each cycle still goes up dramatically.Ethereum currently uses a proof-of-work consensus mechanism. This means that anyone who wants to add new blocks to the chain must solve a difficult puzzle that you need a lot of computing power to work on. Solving the puzzle 'proves' that you have spent the computational resources. Doing this is known as mining. Mining can be trial and error but adding a block successfully is rewarded in Eth. On the other hand, submitting fraudulent blocks is not an attractive option considering the resources you've spent on producing the block.автоматический bitcoin 6000 bitcoin monero форк дешевеет bitcoin cryptocurrency charts tether перевод майнеры monero ethereum clix bitcoin терминалы криптовалют ethereum скачать bitcoin cryptocurrency tech цена bitcoin Ключевое слово bitcoin алгоритм bitcoin игра bitcoin landing ethereum classic продать ethereum black bitcoin майн ethereum gps tether monero gpu blake bitcoin bitcoin spinner ios bitcoin обновление ethereum надежность bitcoin
bitcoin экспресс инвестиции bitcoin twitter bitcoin bitcoin maps master bitcoin bitcointalk monero
bitcoin кошелек bitcoin тинькофф local bitcoin flypool ethereum bitcoin server earn bitcoin bitcoin анализ monero настройка shot bitcoin bitcoin sweeper
bitcoin fork bitcoin testnet aml bitcoin bitcoin заработок исходники bitcoin bitcoin obmen byzantium ethereum monero майнить bitcoin 100 dorks bitcoin forum ethereum tether gps eobot bitcoin
капитализация ethereum bitcoin life bitcoin расшифровка bitcoin q валюты bitcoin ethereum supernova робот bitcoin koshelek bitcoin оплатить bitcoin покер bitcoin bitcoin media bootstrap tether monero сложность
bitcoin pools bitcoin обменники etoro bitcoin андроид bitcoin bitcoin eu If Bitcoin collectively is only worth 1-2% of gold, then each one is down to $5,000 to $10,000.Cryptocurrency TradingAs blockchain technology removes the third party, people can agree on a price that is fair for them both — cutting out the cost that was previously taken by the retailers.bitcoin rotators
Banks don't log money movement, and government tax agencies and police cannot track the money. This may change, as unregulated money is a threat to government control, taxation, and policing. Bitcoins have become a tool for contraband trade and money laundering because of the lack of government oversight. The value of bitcoins skyrocketed in the past because wealthy criminals purchased bitcoins in large volumes. Because there is no regulation, people can lose out as a miner or investor.python bitcoin запросы bitcoin bitcoin сша бумажник bitcoin bitcoin генератор bitcoin magazin ethereum обменять
bitcoin p2p bitcoin создатель bitcoin multisig
bitcoin banking bitcoin курс ethereum динамика bitcoin mmm bitcoin talk ethereum прибыльность ethereum стоимость bitcoin investing panda bitcoin r bitcoin
mining ethereum bitcoin dark
казино ethereum goldmine bitcoin
bitcoin capitalization блокчейн bitcoin bitcoin аккаунт daemon monero
cryptocurrency market bitcoin purchase bitcoin комбайн 10000 bitcoin erc20 ethereum bitcoin математика капитализация ethereum bitcoin wikileaks ethereum обменники monero bitcointalk See also: the 'Bitcoin is illegal because it's not legal tender' myth.bitcoin plugin транзакции ethereum ethereum com time bitcoin трейдинг bitcoin ethereum сбербанк
bitcoin koshelek автомат bitcoin bitcoin spinner casino bitcoin asics bitcoin bitcoin github loans bitcoin bitcoin store bitcoin plus bitcoin poloniex bitcoin compare протокол bitcoin surf bitcoin
mooning bitcoin
bitcoin eu bitcoin co car bitcoin abi ethereum сборщик bitcoin accelerator bitcoin bitcoin обмен bitcoin установка пулы ethereum технология bitcoin source bitcoin
ethereum gold bounty bitcoin ethereum windows best bitcoin платформы ethereum bitcoin транзакции monero ico abi ethereum micro bitcoin segwit2x bitcoin china bitcoin bitcoin rt bitcoin сервисы fpga bitcoin майнинг tether bitcoin лотерея bitcoin dice bitcoin скачать future bitcoin
bitcoin elena bitcoin инструкция fun bitcoin бесплатно bitcoin ethereum coins client ethereum all cryptocurrency ethereum charts bitcoin бумажник future bitcoin monero cpuminer bitcoin department github ethereum up bitcoin email bitcoin bistler bitcoin биткоин bitcoin bitcoin sberbank monero hardware poker bitcoin bitcoin nonce ethereum прогноз адрес ethereum bitcoin орг polkadot скачать bitcoin кредиты bitcoin cryptocurrency reddit ethereum course bitcoin traffic bitcoin playstation платформа bitcoin chaindata ethereum форум bitcoin fpga ethereum monero новости bistler bitcoin bitcoin flapper coinbase ethereum ethereum russia торрент bitcoin
bitcoin pdf trezor bitcoin
bitcoin валюта
free ethereum bitcoin easy captcha bitcoin bitcoin birds эфириум ethereum блоки bitcoin
uk bitcoin ethereum ico