What is bitcoin and how does it work?

17_What is bitcoin and how does it work_

(Australian Associated Press)

WHAT YOU NEED TO KNOW ABOUT BITCOIN

WHAT IS BITCOIN?

Bitcoin is the world’s most used digital currency and a encrypted medium of exchange. Bitcoins are transferred peer to peer online through a system that is collectively managed and requires no central authority.

Bitcoins are digitally signed each time they travel from one owner to the next through the “blockchain”, a public ledger of sorts that notes the history of every bitcoin transaction.

HOW WIDELY USED IS BITCOIN?

Bitcoin is so common that Australia even has a few bitcoin ATMs and several small businesses including cafes and restaurants that accept bitcoin payments. However, it’s still not a mainstream currency.

WHY IS IT CONTROVERSIAL?

Bitcoins allow people to trade money without a third party getting involved. Because of that they have a notorious association with criminal activity. But plenty of people use bitcoins in a perfectly legitimate way to buy goods and services or invest. The technology behind bitcoin is so impressive that big banks like the Commonwealth Bank and ANZ are investigating blockchains for their own future banking methods.

WHERE DID IT COME FROM?

Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto and then adopted by a small clutch of enthusiasts. Nakamoto dropped off the map as bitcoin began to attract widespread attention, but over the years several people have been pointed to as the creator. Australian computer scientist Craig Wright has come forward to declare he is the founder. But who is behind bitcoin doesn’t matter, according to proponents, as the bitcoin process is open-source and the currency follows its own, internal logic.

WHAT’S A BITCOIN WORTH?

The value of a bitcoin is determined by the trading market. While that value has fluctuated wildly and has reached $A1300 for a single bitcoin, one is currently worth $A582. The market has barely taken notice of Wright’s announcement, the currency remaining steady.

0

Like This