Bitcoin





Bitcoin is a digital payment currency that utilizes cryptocurrency (a digital medium of exchange) and peer-to-peer (P2P) technology to create and manage monetary transactions as opposed to a central authority. The open source Bitcoin P2P network creates the bitcoins and manages all the bitcoin transactions.

Often referred to as "cash for the Internet," Bitcoin is one of several popular digital payment currencies along with Litecoin, Peercoin and Namecoin. When the word Bitcoin is capitalized, it usually refers to the software and systems used for bitcoin (in lowercase it means the actual currency).
Bitcoin History

Bitcoin is considered the biggest cryptocurrency. It was first introduced in 2009 and is the most widely-traded cryptocurrency. Bitcoin as an implementation of the cryptocurrency concept was described by Wei Dai in 1998 on the cypherpunks mailing list. Dai suggested a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. In 2009, the Bitcoin specification and proof of concept was published in a cryptography mailing list by Satoshi Nakamoto. As noted in the Official Bitcoin FAQ, Satoshi Nakamoto left the project in late 2010 without revealing much about himself.

How Bitcoin Works

Payments are made via a Bitcoin wallet application that resides on a user's computer or mobile device, and a person only needs to enter the recipient's Bitcoin address information and payment amount before pressing send to complete payment.
Bitcoin Mining

New bitcoins are created by a competitive and decentralized process called "mining". Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange. The Bitcoin protocol ensures new bitcoins are created at a fixed rate, making the process of bitcoin mining a very competitive business.

According to eWeek, efforts to improve Bitcoin mining are now under way, working under the basic assumption that the cheaper you can mine Bitcoins, the more money you can make.

Bitcoin Security

While attackers are going after Bitcoin-related sites, there is an important distinction between the security of the Bitcoin network and the Bitcoin exchanges. According to InternetNews.com, no one has ever found a critical vulnerability within the Bitcoin protocol itself that would allow a user within the Bitcoin network to fraudulently create coins or forge transactions. That said, there have been compromises of various Bitcoin exchanges throughout the virtual currency's lifetime, and as the value of a Bitcoin increases, so does the risk in using exchanges.

Most Important LINK

How Bitcoin Mining Works


Where do bitcoins come from? 
With paper money, a government decides when to print and distribute money. Bitcoin doesn't have a central government. With Bitcoin, miners use special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine.

The first cryptocurrency miner to crack the code is rewarded by being able to authorize the transaction, and in return for the service provided, cryptominers earn small amounts of cryptocurrency of their own. In order to be competitive with other cryptominers, though, a cryptocurrency miner needs a computer with specialized hardware.

Cryptocurrency mining, or cryptomining, is a process in which transactions for various forms of cryptocurrency are verified and added to the blockchain digital ledger. Also known as cryptocoin mining, altcoin mining, or Bitcoin mining (for the most popular form of cryptocurrency, Bitcoin), cryptocurrency mining has increased both as a topic and activity as cryptocurrency usage itself has grown exponentially in the last few years.
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