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Understanding Bitcoin: fraud, or the future of money?
Context:
- In 2009, the first block of that currency, known as Bitcoin, went online.
- To this day, it has undergone a wide range of changes.
Change in opinion about Bitcoin:
- Opinion on Bitcoin is divided on:
- whether its value is a sign of a growing rebellion against a monetary system controlled by corrupt, predatory governments, or, alternately whether it is providing a haven for criminals.
- There are also those who believe that Bitcoin and other digital currencies that have since emerged are simply a giant, collective delusion.
Changes in Bitcoin over eight years:
- The principles underlying Bitcoin make it a democratic alternative to the commercial banking network, and even central banks.
- Bitcoin appealed to a spectrum of libertarians and anarchists, whose value would be determined purely by demand and supply, not by the actions of central banks.
- Bitcoin uses cryptography to securely conduct a transaction between a sender and a recipient.
What is Blockchain?
- Each confirmed transaction is recorded on a public ledger, called a blockchain.
- The blockchain is shared between all users of the Bitcoin network, and updated in real time.
- The underlying mathematics makes it impossible to make duplicate copies of Bitcoin, or use it for more than one transaction at a time.
- Each time a new block or set of transactions is consolidated into a blok, it verifies all those before it. In general, six verifications mean a transaction is 99.99% likely to be genuine.
What is Bitcoin?
- Bitcoin is a worldwide cryptocurrency and digital payment system called the first decentralized digital currency, as the system works without a central repository or single administrator.
- It was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009.
- The system is peer-to-peer, and transactions take place between users directly, without an intermediary.
- These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.
