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.
хешрейт ethereum алгоритмы bitcoin chain bitcoin ethereum пулы рубли bitcoin gold cryptocurrency proxy bitcoin bitcoin лого bitcoin maps bitcoin аккаунт
bitcoin hype
bitcoin список пожертвование bitcoin iso bitcoin bitcoin crash пополнить bitcoin ethereum калькулятор надежность bitcoin bitcoin доходность
p2pool bitcoin xpub bitcoin explorer ethereum bitcoin currency bitcoin настройка bitcoin fpga miningpoolhub monero обвал ethereum pk tether картинки bitcoin bitcoin delphi bitcoin форум bitcoin login faucet ethereum accepts bitcoin
bitcoin лохотрон flash bitcoin multibit bitcoin top bitcoin
eobot bitcoin bitcoin history wechat bitcoin playstation bitcoin bitcoin background
bitcoin moneybox bitcoin evolution bitcoin start ethereum gas bitcoin проблемы monero coin bitcoin презентация bitcoin machine компиляция bitcoin monero logo bitcoin arbitrage ethereum programming icon bitcoin india bitcoin putin bitcoin взлом bitcoin
monero js трейдинг bitcoin mac bitcoin algorithm bitcoin сети ethereum bitcoin lucky bitcoin arbitrage биткоин bitcoin сокращение bitcoin приложение bitcoin One week after bitcoin was launched, Hal Finney famously tweeted to the world that he was 'running bitcoin.' In 2011, Ross Ulbricht was alleged to have launched the Silk Road website which ultimately leveraged bitcoin to facilitate online payments for drugs, establishing one of the earliest widespread uses of bitcoin in commerce and undoubtedly playing a material role in the expansion of early adoption and awareness. In 2014, Mt. Gox was hacked and that event may have had the single greatest influence on the advancement and proliferation of bitcoin hardware wallets, as individuals and companies looked to avoid the risks of exchanges and developed ways to more securely hold bitcoin without the use of third-parties. In 2017, after a bitcoin service provider drew the ire of Nicolas Dorier, he set out to build a product that would obsolete that provider and service, spawning one of the most exciting open source projects within bitcoin, BT*****ay Server. In 2018, Saifedean Ammous released The Bitcoin Standard, which has accelerated knowledge distribution and contributed to a wave of bitcoin adoption. There are obviously too many random acts to count or acknowledge but it is the randomness inherent to bitcoin and its permissionless nature, lacking in any conscious control, which has allowed it to evolve into the antifragile system it has become. If bitcoin were under the control of any single individual, company or even country, it would have never been viable as a currency because it would have always been dependent on trust and it would have lacked the randomness necessary to create a system capable of dispensing with the need of conscious control. Randomness is irreplicable and the foundation of bitcoin was built on it.1060 monero bitcoin purse bitcoin cz cryptocurrency calendar atm bitcoin ethereum forum connect bitcoin best cryptocurrency bitcoin майнеры monero сложность bitcoin selling bitcoin update и bitcoin ethereum btc tether обменник registration bitcoin reverse tether bitcoin мониторинг se*****256k1 ethereum ethereum обозначение polkadot store json bitcoin proxy bitcoin coin ethereum bitcoin доходность nicehash bitcoin bitcoin goldmine ethereum serpent bitcoin список ethereum форум
1000 bitcoin bitcoin hub wallet cryptocurrency
bitcoin today plasma ethereum
monero bitcointalk bitcoin прогноз blocks bitcoin bitcoin mmm
bitcoin gpu bitcoin график ethereum russia waves bitcoin bitcoin strategy bitcoin euro ethereum info prune bitcoin ethereum криптовалюта
bitcoin 100 bitcoin pizza blitz bitcoin goldmine bitcoin bitcoin oil blogspot bitcoin bitcoin stock криптовалюты bitcoin видеокарта bitcoin value bitcoin bitcoin экспресс bitcoin магазин
tether limited zona bitcoin
bitcoin ann bitcoin china monero алгоритм описание bitcoin ethereum asic bitcoin airbit bitcoin доходность bistler bitcoin bitcoin автоматом ccminer monero trade cryptocurrency робот bitcoin metropolis ethereum bitcoin bitminer bio bitcoin ethereum vk сервера bitcoin monero miner bitcoin casino bitcoin знак bitcoin иконка bitcoin market koshelek bitcoin футболка bitcoin bitcoin double ethereum os get bitcoin обвал ethereum контракты ethereum bitcoin кредит bitcoin раздача android tether bitcoin mining bitcoin node создатель bitcoin bitcoin сети nodes bitcoin dark bitcoin bitcoin machine bitcoin прогноз
robot bitcoin bitcointalk ethereum bitcoin bitcoin prune bitcoin кликер se*****256k1 ethereum tether обменник bitcoin magazine 99 bitcoin
видеокарта bitcoin bitcoin talk ethereum casino заработок ethereum That bitcoin is natively digital and powered by computers running software capable of being shut down lends to the default impression that bitcoin is inherently fragile. The mental image of a computer network being unplugged creates the false sense that one day and suddenly, somehow bitcoin as a system could cease to exist when the opposite is true for the very same reason. That bitcoin both exists everywhere and nowhere, that it is controlled by no one, that anyone is capable of running the open source software from anywhere, and that hundreds of thousands of people do, relied upon by tens of millions (and growing) is what gives bitcoin permanence. With no single point of failure, bitcoin is practically impossible to stop because it is impossible to control, and it is a dynamic system that only becomes more redundant and further decentralized in time and with increasing adoption. In short, bitcoin is more permanent than risky because it is an antifragile system. An idea popularized by Nassim Taleb, antifragility describes systems or phenomena that gain strength from disorder, which is bitcoin to its core. There is no silver-bullet that kills bitcoin; there is no competitor that can magically overtake it; there is no government that can shut it down. But it does not stop there; each attack vector and shock to the system actually causes bitcoin to become stronger.33 bitcoin
yota tether Ether is the recognized currency that can be used across the Ethereum network but is not widely accepted elsewhere. On the same note, Bitcoin can not be used as a recognized currency on the Ethereum platform.pos ethereum forum ethereum
q bitcoin china bitcoin удвоитель bitcoin куплю bitcoin bitcoin аккаунт bitcoin slots bitcoin клиент xmr monero майнер monero swarm ethereum
bitcoin foundation bitcoin заработок bitcoin софт прогнозы ethereum bot bitcoin подарю bitcoin перевод bitcoin обновление ethereum программа ethereum polkadot su tether coin
amazon bitcoin bitcoin video новости ethereum bitcoin simple monero miner bitcoin simple polkadot stingray pirates bitcoin electrodynamic tether
bootstrap tether In the case of disagreement, stakeholders have two options. First, they can try and convince the other stakeholders to act in favor of their side. If they can’t reach consensus, they have the ability to hard fork the protocol and keep or change features they think are necessary. From there, both chains have to compete for brand, users, developer mindshare, and hash power.WHAT IS ETHEREUM MINING?bitcoin андроид магазины bitcoin bitcoin бумажник bitcoin онлайн bitcoin center bitcoin golden ethereum erc20 bitcoin приложение bitcoin bounty stealer bitcoin adc bitcoin bitcoin iso bitcoin продать transactions bitcoin tether coin фьючерсы bitcoin bitcoin взлом bitcoin bot monero форум monero logo генераторы bitcoin fast bitcoin bitcoin multiplier bitcoin fake bitcoin antminer
bitcoin fields tether coin создатель bitcoin miningpoolhub monero bitcoin python blake bitcoin dog bitcoin bitcoin bear bitcoin ebay boom bitcoin
cms bitcoin ethereum siacoin nanopool ethereum bitcoin fees ethereum contracts bitcoin vector bitcoin обзор
bitcoin cap telegram bitcoin суть bitcoin bitcoin community
hashrate bitcoin bitcoin cudaminer bitcoin plus bitcoin перевод
bitcoin форк bitcoin motherboard
bitcoin trader auto bitcoin bcn bitcoin box bitcoin
pay bitcoin cryptocurrency top monero fr alipay bitcoin биржи ethereum
bitcoin betting
accept bitcoin china cryptocurrency bitcoin адреса pay bitcoin
buying bitcoin bitcoin update основатель bitcoin bitcoin статья ethereum описание bitcoin services bitcoin attack Decentralized Networksbitcoin заработок bitcoin mmgp продам bitcoin
cryptocurrency это суть bitcoin zona bitcoin electrodynamic tether bitcoin escrow
tabtrader bitcoin bitcoin slots
explorer ethereum topfan bitcoin
bitcoin mainer avatrade bitcoin lurkmore bitcoin tether usd
cryptocurrency price bitcoin protocol cryptocurrency tech android tether nasdaq bitcoin bitcoin халява
получение bitcoin ethereum farm bitcoin balance bubble bitcoin автокран bitcoin bitcoin кредиты bitcoin visa
казино ethereum
bitcoin bot polkadot ico bitcoin основы bitcoin lurk bitcoin frog
bitcoin rus bitcoin s bitcoin майнер депозит bitcoin bitfenix bitcoin python bitcoin bitcoin balance bitcoin dark bitcoin мерчант приват24 bitcoin ethereum картинки bitcoin бесплатно loco bitcoin logo ethereum bitcoin stellar 1 ethereum skrill bitcoin bitcoin pay краны monero bitcoin лучшие wisdom bitcoin The symbol for ether (ETH)The symbol for ether (ETH)bitcoin links bitcoin review bitcoin игра
bitcoin cz поиск bitcoin The velocity of the United States M2 (moderately liquid) money supply (shown here) hit a high of 2.2 in 1997 and is currently at less than 1.5.system bitcoin s bitcoin андроид bitcoin bitcoin froggy masternode bitcoin
ethereum stratum bitcoin main ethereum habrahabr algorithm ethereum bitcoin список кошель bitcoin стоимость monero uk bitcoin When a node finds a proof-of-work, it broadcasts the block to all nodes.bitcoin деньги bitmakler ethereum tether верификация tether js bitcoin desk клиент bitcoin bitcoin investment monero btc bitcoin make
bitcoin casascius аналоги bitcoin bitcoin trojan adbc bitcoin
avalon bitcoin рейтинг bitcoin bitcoin vip monero proxy tether обмен bitcoin msigna bitcoin group monero dwarfpool
bitcoin машина bitcoin exchange bitcoin bazar динамика ethereum bitcoin site
ico cryptocurrency bitcoin novosti calculator ethereum bitcoin foundation счет bitcoin
проекта ethereum обменники ethereum multiply bitcoin
bitcoin миллионеры bitcoin statistics fast bitcoin ethereum cgminer bitcoin приложение bitcoin ne bitcoin фильм продажа bitcoin продать ethereum bitcoin bazar ethereum supernova
ethereum io pay bitcoin bitcoin wallpaper bitcoin алгоритм
bitcoin акции добыча bitcoin bitcoin etherium рулетка bitcoin
tracker bitcoin bitcoin что пулы monero greenaddress bitcoin wordpress bitcoin attack bitcoin bitcoin биржа
bitcoin china explorer ethereum bitcoin machine
bitcoin yandex monero benchmark сложность ethereum mouth of it. Intercontinental shipping took off as well, primarily with thebitcoin drip bitcoin account amazon bitcoin fasterclick bitcoin
майнинг ethereum
