Friday 17 October 2014



          
                
                            Bitcoin
Bitcoin is an experimental, decentralized digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network.
In many ways, Bitcoin is similar to physical payment networks like Visa credit cards or Paypal. But Bitcoin is different from those and other payment networks in two important ways. It has a peer-to-peer structure, with hundreds of computers all over the Internet working together to process Bitcoin transactions.
People don't need anyone's permission or assistance to create new Bitcoin-based financial services.The second thing that makes the Bitcoin unique is that it comes with its own currency. Paypal and Visa conduct transactions in physical currencies such as the U.S. dollars. The Bitcoin network, however, conducts transactions in a new monetary unit, also called Bitcoin.
Why would we use a payment network based on an imaginary currency?
 Almost everyone who encounters the idea for the first time (including me) has the same reaction: That can't possibly work. But so far the market has proved the skeptics wrong:
This graph shows the price of one Bitcoin since the start of 2011, when the currency began to adopt mainstream attention. The price has been extraordinarily volatile -- it lost more than 90 percent of its value between June and October 2011, for example. But there's also been an unmistakable upward trend. Notice that the chart is on a logarithmic scale. It shows the currency's value rising from around $0.30 at the start of 2011 to around $600 today. There are almost 12 million bitcoins in existence, so the Bitcoin "money supply" is now worth around $7 billion..
 Who created Bitcoin?
The currency was created by a person who indentified himself as "Satoshi Nakamoto." While the name sounds Japanese, Bitcoin's creator never provided any personal details. Nakamoto passed his torch to a mild-mannered developer named Gavin Andressen, who is currently the project's lead developer. Andressen now works under the auspices of the Bitcoin Foundation, the closest thing the anarchic Bitcoin community has to an official public face.
 How do we get bitcoins?
One option is to mine them yourself, but that's not a good choice for beginners. For everyone else, your best bet is to purchase them with a physical currency. Web sites known as exchanges will let you trade bitcoins for physical currencies with other users. Even more convenient are companies like Coinbase, which will withdraw cash from your bank account and convert it to bitcoins at the current exchange rate. A few  are popping up, which will directly trade paper money for Bitcoins.
Wallet 


After you bought some bitcoins , Next you'll need a place to store them. Bitcoins are stored in "wallets," which in this case are just files that contain encryption keys, or secret codes that allow you to transfer your bitcoins to other people. There are several options. One is to store them yourself using one of the Bitcoin programs available for Mac, PC and Android.
Another option is to entrust them to a third-party Web site known as a "online wallet."
A third option is what's known as a "paper wallet," where you print out your encryption keys and store them in a safe place, such as a safe deposit box.
Why Use Bitcoin?
 
Low Fees

Bitcoin is a digital currency that is designed for global commerce in the modern age, with the ease of a credit card but without the high fees.
Global

Bitcoin can be used at the same value anywhere in the world where Bitcoins are authorized, thus becoming the first truly global currency.

Protected

 

The nature of Bitcoin means that, compared to credit cards or other financial tools, your identity is safer from theft. Your level of privacy is up to you, and in the online world privacy and protection are an asset.

How Bitcoin Works
  
Digitally Created

Financial systems take a lot of power to run. With Bitcoin, individuals and groups willing to dedicate computer processing power to support the network are rewarded with Bitcoins. This process is known as mining, and it's how every Bitcoin comes into existence.

Secure

All newly mined Bitcoins, along with every transaction, are publicly recorded and verified through the network. This record is known as the Blockchain and is one of the features that helps keep the system secure from fraud and abuse. Bitcoins cannot be duplicated or forged.  

Getting Started With Bitcoin

Storage

There are several ways to store and manage your Bitcoins. An online web wallet is an easy way to get started with storing Bitcoin, and more and more wallets are offering the ability to buy Bitcoin in your local currency.

Trade Locally

You can acquire Bitcoins by buying or trading for them from local vendors, or accepting them for your business instead of cash or credit.

Exchange Globally

To use Bitcoin at a more advanced level, an exchange connects you to people all around the world buying and selling Bitcoins. Exchanges offer both a web wallet for storage and management, and an easy way to trade using major currencies.










By Ankush Mohanty
Categories:

68 comments:

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    Ankush Mohanty: is a Security Researcher and Analyst, with experience in various aspects of Information Security. Other then this he is a Certified Ethical Hacker. His all efforts are to make internet more Secure.


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