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Bitcoin: The World’s First Decentralized Currency – History

With the recent Collapse in the price of Bitcoin I wanted to share a bit more about the currency, here is part 1, all about the history of Bitcoin, What it is and how you could buy it

Capitalization and changing of a specific letter in lowercase will alter the meaning of the entire word. Quite rare for a certain word to change its meaning after small adjustment. This is the case for “Bitcoin” and “bitcoin”. Bitcoin with a capitalized “B” refers to the system itself while bitcoin with lowercase “b” refers to the actual currency. Bitcoin is a peer-to-peer payment system and a form of digital or virtual currency. It is also called cryptocurrency – a digital medium of exchange. Bitcoin allows you to buy goods and services and exchange money across borders without the involvement of banks, credit card issuers or middlemen. It is basically lines of computer code that are digitally signed each time they travel from one owner to the next. This exotic new form of money became popular and attracted the interests of persons who believes in the doctrine of free will (libertarians), tech enthusiasts, speculators and of course criminals. A process called mining creates Bitcoins. Participants verify and record payments in exchange for transaction fees and newly minted bitcoins.

What’s a bitcoin worth?

Just like any other currency, they fluctuate in value relative to other currencies and there is no centralised exchange for it. Each time a bitcoin changes ownership from seller to buyer, the two parties need to meet halfway on its price. There is no fixed price. It’s the seller’s responsibility to give a fair price to the buyer based on what rate bitcoins are being traded in elsewhere.

Owning, obtaining and selling bitcoins

Obtaining bitcoins is just like stealing candy from a baby – an easy process. The common ways are:
Bitcoins can be accepted as a form of payment if you are selling goods and services, or You can purchase and sell bitcoins through Bitcoin exchanges which are typically found online and one of the most common ways, Bitcoins can be traded for traditional currencies of different countries.

Mt. Gox is the largest bitcoin exchange on the internet. Bitcoins are stored in a digital wallet, which exists either in the data center or on a user’s computer. The wallet is a kind of digital or virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money. Bitcoin wallets are not insured by the FDIC unlike bank accounts. Essential to Bitcoin is a public collection of financial accounts of a particular type, a database with a sequential record of all transactions, called as the block chain, which records bitcoin ownership at present and at all points in the past. The block chain prevents double-spending (a problem particular to digital money) by keeping a record of all transactions.

History of Bitcoin

Bitcoin was first mentioned in a 2008 paper published under the pseudonym Satoshi Nakamoto. The first open source client or wallet, Bitcoin-Qt, and the first bitcoins were issued in the early 2009. It was also in this year that large amounts of bitcoins were created and led to various technical problems. The first Bitcoin transaction happened in January 12, 2009. To create a market, in February 6, 2010 Bitcoin market is established. A major update to the site occurred in March, 2011. Among the changes were the standardization of the minimum trade size, 24 X 7 trading, and steps to ensure that payment will be made for trades that execute. In February 28, 2013, the Mt Gox exchange rate broke the June 8 2011 peak of 31.91 US dollars. But in April 1 of the same year, Bitcoin price breaks 100 USD on MtGox and other major exchanges.

Category: Economy, News, PERSONAL, Technology