What is bitcoin wiki answers english
Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen.
From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.
Bitcoin is the first implementation of a concept called what is bitcoin wiki answers english, which was first described in by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority.
The first Bitcoin specification and proof of concept was published in in a cryptography mailing list by Satoshi Nakamoto.
Satoshi left the project in late without revealing much about himself. The what is bitcoin wiki answers english has since grown exponentially with many developers working on Bitcoin.
Satoshi's anonymity often raised unjustified concerns, many of which are linked to misunderstanding of the open-source nature of Bitcoin. The Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software. Just like current developers, Satoshi's influence was limited to the changes he made being adopted by others and therefore he did not control Bitcoin. As such, the identity of Bitcoin's inventor is probably as relevant today as the identity of the person who invented paper.
Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can't force a change in the Bitcoin protocol because all users are free to choose what software and version they use.
In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus. From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them.
This is how Bitcoin works for most users. Behind the scenes, the Bitcoin network is sharing a public ledger called the "block chain". This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction.
The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have what is bitcoin wiki answers english control over sending bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service.
This is often called "mining". To learn more about Bitcoin, you can consult the dedicated page and the original paper. There are a growing number of businesses and individuals using Bitcoin. This includes brick-and-mortar businesses like restaurants, apartments, and law firms, as well as popular online services such as Namecheap, Overstock.
While Bitcoin remains a relatively new phenomenon, it is growing fast. At the end of Aprilthe total value of all existing bitcoins exceeded 20 billion US dollars, with millions of dollars worth of bitcoins exchanged daily. While it may be possible to find individuals who wish to sell bitcoins in exchange for a credit card or PayPal payment, most exchanges do not allow funding via these payment methods.
This is due to cases where someone buys bitcoins with PayPal, and then reverses their half of the transaction. This is commonly referred to as a chargeback. Bitcoin payments are easier to make than debit or credit card purchases, and can be received without a merchant account.
Payments are made from a wallet application, either on your computer or smartphone, by entering the recipient's address, the payment amount, and pressing send. To make it easier to enter a recipient's address, many wallets can obtain the address by scanning a QR code or touching two phones together with NFC technology.
Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time.
Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.
You should never expect to get rich with Bitcoin or any emerging technology. It is always important to be wary of anything that sounds too good to be true or disobeys basic economic rules. Bitcoin is a growing space of innovation and there are business opportunities that also include risks. There is no guarantee that Bitcoin will continue to grow even though it has developed at a very fast rate so far. Investing time and resources on anything related to Bitcoin requires entrepreneurship.
There are various ways to make money with Bitcoin such as mining, speculation or running new businesses. All of these methods are competitive and there is no what is bitcoin wiki answers english of profit. It is up to each individual to make a proper evaluation of the costs and the risks involved in any such project. Bitcoin is as virtual as the credit cards and online banking networks people use everyday.
Bitcoin can be used to pay online and in physical stores just like any other form of money. Bitcoins can also be exchanged in physical form what is bitcoin wiki answers english as the Denarium coinsbut paying with a mobile phone usually remains more convenient. Bitcoin balances are stored in a large distributed network, and they cannot be fraudulently what is bitcoin wiki answers english by anybody. In other words, Bitcoin users have exclusive control over their funds and bitcoins cannot vanish just because they are virtual.
Bitcoin is designed to allow its users to send and receive payments with an acceptable level of privacy as well as any other form of money. However, Bitcoin is not anonymous and cannot offer the same level of privacy as cash.
The use of Bitcoin leaves extensive public records. Various mechanisms exist to protect users' privacy, and more are in development. However, there is still work to be done before these features are used correctly by most Bitcoin users.
Some concerns have been raised that private transactions could be used for illegal purposes with Bitcoin. However, it is worth noting that Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems. Bitcoin cannot be more anonymous than cash and it what is bitcoin wiki answers english not likely to prevent criminal investigations from being conducted. Additionally, Bitcoin is also designed to prevent a large range of financial crimes.
When a user loses his wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain what is bitcoin wiki answers english the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key s that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.
The Bitcoin network can already process a much higher number of transactions per second than it does today. It is, however, not entirely ready to scale to the level of major credit card networks. Work is underway to lift current limitations, and future requirements are well known. Since inception, every aspect of the Bitcoin network has been in a continuous process of maturation, optimization, and specialization, and it should be expected to what is bitcoin wiki answers english that way for some years to come.
As traffic grows, more Bitcoin users may use lightweight clients, and full network nodes may become a more specialized service. For more details, see the Scalability page on the Wiki. To the best of our knowledge, Bitcoin has not been made illegal by legislation in most jurisdictions. However, some jurisdictions such as Argentina and Russia severely restrict or ban foreign currencies.
Other jurisdictions such as Thailand may limit the licensing of certain entities such as Bitcoin exchanges. Regulators from various jurisdictions are taking steps to provide individuals and businesses with rules on how to integrate this new technology with the formal, regulated financial system.
Bitcoin is money, and money has always been used both for legal and illegal purposes. Cash, credit cards and current banking systems widely surpass Bitcoin in terms of their use to finance crime. Bitcoin can bring significant innovation in payment systems and the benefits of such innovation are often considered to be far beyond their potential drawbacks.
Bitcoin is designed to be a huge step forward in making money more secure and could also act as a significant protection against many forms of financial crime. For instance, bitcoins are completely impossible to counterfeit. Users are in full control of their payments and cannot receive unapproved charges such as with credit card fraud. Bitcoin transactions are irreversible and immune to fraudulent chargebacks.
Bitcoin allows money to be secured against theft and loss using very strong and useful mechanisms such as backups, encryption, and multiple signatures. Some concerns have been raised that Bitcoin could be more attractive to criminals because it can be used to what is bitcoin wiki answers english private and irreversible payments.
However, these features already exist with cash and wire transfer, which are widely used and well-established. The use of Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems, and Bitcoin is not likely to prevent criminal investigations from being conducted. In general, it is common for important breakthroughs what is bitcoin wiki answers english be perceived as being controversial before their benefits are well understood.
The Internet is a good example among many others to illustrate this. The Bitcoin protocol itself cannot be modified without the cooperation of nearly all its users, who choose what software they use.
Attempting to assign special rights to a local authority in the rules of the global Bitcoin network is not a practical possibility. Any rich organization could choose to invest in mining hardware to control half of the computing power of the network and become able to block or reverse recent transactions.
However, there is no guarantee that they could retain this power since this requires to invest as much than all other miners in the world. It is however possible to regulate the use of Bitcoin in a similar way to any other instrument.
What is bitcoin wiki answers english like the dollar, Bitcoin can be used for a wide variety of purposes, some of which can be considered legitimate or not as per each jurisdiction's laws.
In what is bitcoin wiki answers english regard, Bitcoin is no different than any other tool or resource and can be subjected to different regulations in each country.
Bitcoin is a digital and global money system currency. It allows people to send or receive money across the internet, even to someone they don't know or don't trust. Money can be exchanged without being linked to a real identity. The mathematical field of cryptography is the basis for Bitcoin's security. A Bitcoin address, or simply address, is an identifier of letters and numbers, beginning with the number 1 or 3, that represents a possible destination for a bitcoin payment.
Addresses can be generated at no cost by any user of Bitcoin. For example, using Bitcoin Core, one can click "New Address" and be assigned an address. It is also possible to get a Bitcoin address using an account at an exchange or online wallet service.
One of the differences between using bitcoin and using regular money online is that bitcoin can be used without having an internet connection to link any sort of real-world identity to it. Unless someone chooses to link their name to a bitcoin address, it is hard to tell who owns the address. Bitcoin does not keep track of users; it keeps track of addresses where the money is.
Each address has two important pieces of cryptographic information, or keys: The public key, which is what the "bitcoin address" is created from, is similar to an email address; anyone can look it up and send bitcoins to it. The private address, or private key, is similar to an email password; only with it can the owner send bitcoins from it. Because of this, it is very important that this private key is kept secret.
To send bitcoins from an address, you prove to the network that you own the private key that corresponds to the address, without revealing the private key. This is done with a branch of mathematics known what is bitcoin wiki answers english public key cryptography.
A public key is what determines the ownership of bitcoins, and is very similar to an ID number. If someone wanted to send you bitcoins, all you would need to do is supply them your bitcoin address, which is a version of your public key that is easier to read and type. Anyone using the system can see how much money "ABC" has and how much money "DEF" has, but they cannot tell anything about who owns the address. But Bob and Alice each have a second key which only they individually know.
This is the private key, and it is the "other half" of a Bitcoin address. The private key is never shared, and allows the owner of the bitcoins to control them.
However, if the private key is not kept secret, then anyone who sees it can also control and take the bitcoins there. The person who took it, told what is bitcoin wiki answers english about it later, saying "I'll send it back once Matt gives me a new address, since someone else can sweep [empty] out the old one.
Sites or users using the Bitcoin system are required to use a global database called the blockchain. The blockchain is a record of all transactions that have taken place in the Bitcoin network. What is bitcoin wiki answers english also keeps track of new bitcoins as they are generated. With these two facts, the blockchain is able to keep track of who has how much money what is bitcoin wiki answers english all times.
To generate a bitcoin, a miner must solve a math problem. However, the difficulty of the math problem depends on how many people are mining for bitcoin at the moment. Because of how complicated what is bitcoin wiki answers english math problems usually are, they must be calculated with very powerful processors.
The process of generating the bitcoins is called mining. People who use these machines to mine bitcoins are called miners. Miners either compete with one another or work together in groups to solve a mathematical puzzle.
The first miner or group of miners to solve the particular puzzle are rewarded with new bitcoins. The puzzle is determined by the transactions being sent at the time and the previous puzzle solution.
This what is bitcoin wiki answers english the solution to one puzzle is always different from the puzzles before. Attempting to change an earlier transaction, maybe to fake bitcoins being sent or change the number of someone's bitcoins, requires solving that puzzle again, which takes a lot of work, and also requires solving each of the following puzzles, which takes even more work.
This means a bitcoin cheater needs to outpace all the other bitcoin miners to change the bitcoin history. This makes the bitcoin blockchain very safe to use. A popular image associated with Bitcoin is a QR code. QR codes are a group of black and white boxes that are similar to barcodes. Barcodes have one dimension of information, while QR codes have two horizontal and vertical. Barcodes are a row of lines, and QR codes are a grid of squares. Bitcoin uses QR codes because they can store a lot of information in a small space, and a camera such as a smartphone can read them.
The two QR codes on the Bitcoin note are the public and private addresses, and can be scanned with a number of online tools.
Everyone in the Bitcoin network is considered a peer, and all addresses are created equal. All transactions can take place solely from peer to peer, but a number of sites exist to make these transactions simpler. These sites are called exchanges. Exchanges provide tools for dealing in Bitcoin. Some allow the purchase of Bitcoin from external accounts, and others allow trading with other cryptography-based currencies like Bitcoin.
Most exchanges also provide a basic "wallet" service. Wallets provide a handy way what is bitcoin wiki answers english keep track of all of a user's public and private addresses. Because addresses are pseudo-anonymous, anyone can have as many addresses as they want.
This is useful for dealing with multiple people, but it can get complicated to manage multiple accounts. A wallet holds all of this information in a convenient place, just like a real wallet would. A backup of a wallet prevents 'losing' the bitcoins.
Bitcoin adoption and use continues to grow a lot every year. SinceBitcoin has gained the attention of the mainstream media; one way is the WannaCry ransomware created in May Bitcoin has often been criticized what is bitcoin wiki answers english its unstable price, its network's high electricity consumption, and for its high transaction fees.
Additionally, it has been criticized for having characteristics in common what is bitcoin wiki answers english Ponzi and pyramid schemes. From Wikipedia, the free encyclopedia. Retrieved 9 March Retrieved from " https: Views Read Change Change source View history. In other projects Wikimedia Commons. This page was last changed on 7 Mayat See Terms of Use for details.