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 transaction падение ethereum habrahabr bitcoin bitcoin collector
bitcoin конвертер
1 ethereum golden bitcoin
bitcoin best bitcoin cryptocurrency bitcoin it bitcoin wordpress падение ethereum bistler bitcoin carding bitcoin bitcoin автосерфинг ecopayz bitcoin
monero обмен
bitcoin приложения tether курс boom bitcoin bitcoin symbol карты bitcoin fpga ethereum ethereum прибыльность business bitcoin ethereum block bitcoin tools bitcoin neteller
ethereum доходность bitcoin apk An offline environment plays a key role in most cold storage schemes. Two main components make up this environment: an offline computer for generating keys and signing transactions; and an offline storage medium for holding private keys.бизнес bitcoin фьючерсы bitcoin rigname ethereum bitcoin лотерея bitcoin froggy web3 ethereum microsoft ethereum
ubuntu bitcoin 2016 bitcoin bitcoin bot crococoin bitcoin отзыв bitcoin spend bitcoin monero продать dice bitcoin tor bitcoin
bitcoin rpg bitcoin сбербанк bitcoin блог tether валюта ethereum contracts bitcoin получить я bitcoin bitcoin motherboard torrent bitcoin trade cryptocurrency обменники bitcoin life bitcoin market bitcoin 1000 bitcoin падение ethereum bitcoin news bitcoin 3d all bitcoin bitcoin blocks bitcoin roll
vps bitcoin bitcoin cryptocurrency abc bitcoin bitcoin pps
maining bitcoin теханализ bitcoin ethereum ethash tether верификация теханализ bitcoin car bitcoin tether пополнить bitcoin delphi youtube bitcoin bitcoin wsj bitcoin steam eth ethereum tether программа значок bitcoin bitcoin tradingview bitcoin магазин delphi bitcoin bitcoin register
ethereum stratum bitcoin это bitcoin pools dat bitcoin flappy bitcoin добыча bitcoin testnet bitcoin store bitcoin
wired tether bitcoin pay
bitcoin депозит auto bitcoin bitcoin инвестирование bitcoin презентация ethereum пул coin bitcoin bitcoin компания ethereum coins сайт ethereum ubuntu ethereum bank bitcoin world bitcoin
wirex bitcoin monero usd bitcoin car bitcoin maps bitcoin review tether bootstrap стоимость bitcoin bitcoin nachrichten bitcoin hosting bitcoin analytics
cranes bitcoin bitcoin blog cryptocurrency ico bitcoin accelerator tether комиссии расчет bitcoin бесплатно ethereum bitcoin nasdaq bitcoin best SECbitcoin ukraine In Russia, though cryptocurrencies are legal, it is illegal to actually purchase goods with any currency other than the Russian ruble. Regulations and bans that apply to bitcoin probably extend to similar cryptocurrency systems.lottery bitcoin bitcoin fasttech
Objection: Bitcoin Is Not Worse, It’s BetterCryptocurrencies are used primarily outside existing banking and governmental institutions and are exchanged over the Internet.bitcoin trader Example: 7,997,769 (99.97%)bitcoin краны *****p ethereum security bitcoin
падение ethereum bitcoin кэш bitcoin free дешевеет bitcoin bitcoin отследить currency bitcoin bitcoin seed
майнинга bitcoin bitcoin get nonce bitcoin bitcoin кранов компиляция bitcoin bitcoin пулы bitcoin переводчик bitcoin dump bitcoin neteller терминалы bitcoin ethereum логотип tether android
monero xeon bitcoin вконтакте wallet cryptocurrency bitrix bitcoin total cryptocurrency golden bitcoin bitcoin анализ купить bitcoin *****a bitcoin moon ethereum bitcoin timer tether 4pda
monero usd etoro bitcoin bitcoin сайт japan bitcoin bitcoin ethereum wm bitcoin tether bootstrap ethereum homestead
сети ethereum bitcoin вложения bitcoin analysis lealana bitcoin bitcoin trading ethereum habrahabr сайте bitcoin bitcoin today казино bitcoin заработок bitcoin книга bitcoin ethereum ротаторы bitcoin адреса анонимность bitcoin котировки bitcoin bitcoin get bitcoin mempool gek monero bitcoin заработок бесплатные bitcoin bitcoin apk bitcoin today mixer bitcoin accepts bitcoin
programming bitcoin bitcoin mempool hub bitcoin bitcoin видеокарта time bitcoin bitcoin кран bitcoin mining bitcoin сервисы bitcoin utopia nubits cryptocurrency
bitcoin майнить bitcoin картинка bitcoin бесплатный ethereum serpent bitcoin formula bitcoin начало poloniex monero monero difficulty bitcoin weekend технология bitcoin box bitcoin стоимость monero gui monero bitcoin motherboard card bitcoin bitcoin like reddit ethereum tinkoff bitcoin bitcoin автомат bitcoin jp bounty bitcoin ethereum токен bitcoin auto course bitcoin steam bitcoin pro100business bitcoin bitcoin etf bitcoin hype bitcoin роботы
bitcoin блог machine bitcoin bitcoin phoenix форумы bitcoin time bitcoin The block (or container) carries lots of different transactions, including John’s. Before the funds arrive in Bob’s wallet, the transaction must be verified as legitimate.виталий ethereum In other words, decentralization and scalability are currently at odds, but developers are hunting for ways around this.top bitcoin bitcoin buying autobot bitcoin ethereum poloniex
mining bitcoin bitcoin litecoin ann ethereum ethereum investing xbt bitcoin биржа monero waves bitcoin ethereum видеокарты monero форк bitcoin 3 ютуб bitcoin bitcoin indonesia pool bitcoin linux ethereum bitcoin registration обменники bitcoin aml bitcoin bitcoin видеокарты bitcoin теханализ bitcoin информация алгоритм bitcoin bitcoin direct bitcoin баланс ethereum block monero пул bitcoin rpc bitcoin habr bitcoin создать
finney ethereum описание bitcoin bitcoin продать invest bitcoin flash bitcoin bitcoin обменять
roboforex bitcoin bitcoin trinity oil bitcoin
wallpaper bitcoin bitcoin delphi monero hardware Ethereum's suggested Slasher protocol allows users to 'punish' the cheater who forges on top of more than one blockchain branch.генераторы bitcoin q bitcoin
app bitcoin
список bitcoin удвоитель bitcoin converter bitcoin bitcoin trezor платформ ethereum lamborghini bitcoin bitcoin buy bitcoin trinity
заработать monero trezor bitcoin euro bitcoin bitcoin лучшие автомат bitcoin альпари bitcoin bitcoin capital ethereum прогноз
bitcoin rpg cryptocurrency arbitrage panda bitcoin ethereum tokens blogspot bitcoin planet bitcoin bitcoin sec analysis bitcoin monero пулы bitcoin exchanges ethereum news баланс bitcoin bitcoin вывести swiss bitcoin bitcoin статья monero rur генераторы bitcoin
bitcoin протокол bitcoin игры сборщик bitcoin simple bitcoin zcash bitcoin alpari bitcoin майнер bitcoin
bitcoin расшифровка фермы bitcoin monero новости обвал ethereum bitcoin tm китай bitcoin bitcoin swiss bitcoin plugin добыча bitcoin ethereum faucet email bitcoin андроид bitcoin автоматический bitcoin nicehash bitcoin форумы bitcoin best cryptocurrency bitcoin daemon
bitcoin динамика стоимость bitcoin bitcoin hd ethereum org loan bitcoin bitcoin exchange rpc bitcoin bitcoin quotes серфинг bitcoin 50 bitcoin рейтинг bitcoin panda bitcoin coin ethereum ethereum exchange bitcoin cc bitcoin пулы bitcoin s moneybox bitcoin эфир ethereum iota cryptocurrency bitcoin криптовалюта сбербанк bitcoin торрент bitcoin bitcoin redex algorithm bitcoin bitcoin darkcoin monero hardware bitcoin knots
иконка bitcoin
обзор bitcoin ethereum core fields bitcoin ethereum tokens портал bitcoin blogspot bitcoin ethereum asics nxt cryptocurrency bitcoin алгоритм bitcoin masters bitcoin buying pplns monero monero pools bitcoin poker clockworkmod tether bitcoin hash проблемы bitcoin
bitcoin aliexpress ninjatrader bitcoin bitcoin cudaminer bitcoin mac bitcoin 20 check bitcoin bitcoin magazine bitcoin sha256 аналоги bitcoin bitcoin vip биткоин bitcoin cz bitcoin bitcoin global bitcoin charts
bitcoin приложение банк bitcoin ethereum news отслеживание bitcoin status bitcoin создатель bitcoin
взлом bitcoin bitcoin 2020 boom bitcoin bitcoin удвоить Ameer RosicThe system of checks and balances, with four stakeholders, is detailed belowрулетка bitcoin ethereum фото FinCEN has published that Bitcoin miners aren't taken as Money Transmitters under the Act of Bank Secrecy and clarified recently that cloud mining services provides are as well not considered as Money Transmitters.keys bitcoin перспективы ethereum bitcoin пузырь bitcoin видеокарты перспективы bitcoin заработок bitcoin reklama bitcoin bitcoin index tera bitcoin bitcoin символ love bitcoin кости bitcoin tether верификация bitcoin rotator swarm ethereum количество bitcoin block bitcoin monero форк course bitcoin ethereum siacoin ethereum geth
bitcoin продам перевод tether отследить bitcoin новости bitcoin виталик ethereum транзакции bitcoin trade cryptocurrency buy tether monster bitcoin ltd bitcoin bitcoin masternode poloniex ethereum bitcoin com сбербанк bitcoin monero xmr полевые bitcoin tether coin bitcoin network bitcoin faucet
блокчейн ethereum стоимость monero bitcoin кредит mine ethereum ethereum pow monero transaction bitcoin kazanma
claim bitcoin bitcoin покер баланс bitcoin терминал bitcoin краны monero amazon bitcoin bitcoin получить mempool bitcoin автокран bitcoin txid bitcoin обменник monero bitcoin blocks bitcoin алгоритм bitcoin delphi ethereum wikipedia ethereum вики bitcoin mining
bitcoin вход валюта bitcoin
bitcoin пузырь иконка bitcoin bitcoin price андроид bitcoin bitcoin carding
купить bitcoin bitcoin foundation market bitcoin надежность bitcoin lealana bitcoin debian bitcoin сети ethereum ethereum википедия продажа bitcoin технология bitcoin займ bitcoin
credit bitcoin casinos bitcoin робот bitcoin bitcoin зебра
bitcoin зарегистрировать monero pools
bitcoin dollar siiz bitcoin ethereum news ethereum chart
keystore ethereum форки ethereum bitcoin mining конвертер bitcoin bitcoin trust monero coin bitcoin check ethereum serpent ethereum курсы This article challenges that view by showing nearly all of the technical components of bitcoin originated in the academic literature of the 1980s and 1990s . This is not to diminish Nakamoto's achievement but to point out he stood on the shoulders of giants. Indeed, by tracing the origins of the ideas in bitcoin, we can zero in on Nakamoto's true leap of insight—the specific, complex way in which the underlying components are put together. This helps explain why bitcoin took so long to be invented. Readers already familiar with how bitcoin works may gain a deeper understanding from this historical presentation. Bitcoin's intellectual history also serves as a case study demonstrating the relationships among academia, outside researchers, and practitioners, and offers lessons on how these groups can benefit from one another.отзыв bitcoin отзыв bitcoin bitcoin миксер 