Notes

What is bitcoin very popular cryptocurrency - in 2022
What Is Bitcoin?

Bitcoin is a decentralized digital currency which was invented around January 9, 2009. It was conceived as a follow-up to the ideas laid out in the white paper by the unknown as well as pseudonymous Satoshi Nakamoto.12 This is why the individual or people behind the invention of the technology is a mystery. Bitcoin provides the promise of lower transaction costs than the traditional online payment platforms as well as, unlike other currencies issued by governments that are controlled by a decentralized body.

Bitcoin is referred to as a kind of cryptocurrency due to the fact that it uses cryptography to keep it safe. There are no physical bitcoins. All balances are of a ledger public accessible to everyone to (although each record is encrypted). Every one of Bitcoin transactions are verified with a huge amount of computing power through a procedure called "mining." Bitcoin isn't created or guaranteed by banks or government but neither is a person's bitcoin a valuable commodity. Despite being not legal to use in many parts of the world, Bitcoin has become extremely popular and has led to the launch of many other cryptocurrencies and is collectively referred to as altcoins. Bitcoin is commonly abbreviated as BTC when traded.

Key TAKEAWAYS

Since its launch in 2009 Bitcoin is the biggest cryptocurrency by market capitalization.


The difference between Bitcoin and fiat currency is that Bitcoin is developed, distributed, traded, and stored using the help of an uncentralized ledger system otherwise known as a "blockchain.

cardi b make money move of Bitcoin as a store of value has been turbulent. It has experienced several periods of boom and bust in its relatively short span of time.

* As the initial virtual currency that has enjoyed widespread popularity and success, Bitcoin has inspired a multitude of other currencies as a result.


What is Bitcoin

Understanding Bitcoin

The Bitcoin platform is a collection of computers (also known as "nodes" also known as "miners") that run Bitcoin's algorithm and store its digital currency. The concept of a blockchain could be considered a collection of blocks. Each block is comprised of transactions. Because all computer systems running the blockchain have the same set of blocks and transactions and can transparently be aware of these blocks as they are filled with fresh Bitcoin transactions, no one could ever cheat the system.

Anyone, regardless of if they're a Bitcoin "node" as well not--can observe these transactions in real time. To achieve a nefarious act such as this, the criminal would need to operate 51% of the computing power used to create Bitcoin. Bitcoin has approximately 13,768 full nodes, as of mid-November , 2021 and this is growing and making an attack highly unlikely.3

However, if an attack occurred, Bitcoin miners--the people who participate in the Bitcoin network through their computers -- would likely be split into a new blockchain, rendering what the perpetrator put forth to achieve an attack pointless.


Account balances from Bitcoin tokens are kept by using the public and private "keys," which are long strings of numbers and letters tied together by the mathematical encryption algorithm that creates the keys. Private keys (comparable to an account number in a bank) serves as the address made public to the world and allows other users to send Bitcoin.

Keys that are private (comparable as an ATM PIN) is designed to function as secured and only used to allow Bitcoin transmissions. Bitcoin keys do not need to be confused the Bitcoin wallet, which is a physical (or digital) device, which facilitates transaction of Bitcoin and lets users monitor ownership of their coins. The word "wallet" can be off-base since Bitcoin's distributed nature means that it's not stored "in" a wallet, however, it is instead distributed on the blockchain.


Peer-to-Peer Technology


Bitcoin is one of the first digital currencies that make use of peer-to_peer (P2P) technology to allow quick payments. The businesses and individuals who control the governing computing power and also participate in the Bitcoin network -- Bitcoin "miners"--are in charge of processing transactions on the blockchain. They are motivated by reward (the release of a new Bitcoin) and fee for transactions paid in Bitcoin.


The miners can be considered as a decentralized agency that is responsible for the reliability that is the Bitcoin network. Bitcoins are released to miners at a predetermined and periodically decreasing rate. There are just 21 million bitcoins that could be mined in total. As of November 2021, there are more than 18.875 million Bitcoin in existence and under 2.125 millions Bitcoin remain to mine.4


This is how Bitcoin and other cryptocurrency work differently from fiat currency; in centralized banking systems, the currency is created at a rate which is proportional to the growth of the economy. This system is designed to guarantee price stability. Decentralized systems, such as Bitcoin is able to set the rate of release ahead of time and in accordance with an algorithm.


Bitcoin Mining


Bitcoin mining refers to the method in which Bitcoin gets released into circulation. Typically, mining involves solving intricate computational puzzles to locate the newest block. This block is then added onto the Bitcoin blockchain.


Bitcoin mining can be used to verify transactions recorded on the network. Miners get rewarded with Bitcoin in exchange for half every 210,000 blocks. The block reward was 50 new bitcoins in 2009. On May 11 2020, the third cutting of the reward occurred, bringing reward for each block discovery all the way to 6.25 bitcoins.5


A variety of hardware can be employed with various hardware to make Bitcoin. Some of them yield higher payouts over other types of hardware. Certain computer chips, called"application-specific Integrated Circuits" (ASICs), and more sophisticated processing units, like graphics processing units (GPUs), can achieve greater benefits. These sophisticated mining processors are commonly referred to as "mining equipments."


One bitcoin is divisible up to one eighth decimal (100 millionths of a bitcoin), and this lowest unit is commonly referred to as a Satoshi.6 If needed and the participating miners agree to the change, Bitcoin may be eventually possible to be divisible up to even more decimal places.


Initial Timeline of Bitcoin


Aug. 18, 2008


Domain name Bitcoin.org is registered.7 Today, at best, this domain's name has become WhoisGuard Protected, meaning the identity of the person who registered the domain is not made public.


Oct. 31, 2008


An individual or group under the name Satoshi Nakamoto announces in the Cryptography Mailing List at metzdowd.com: "I've been working on a new electronic cash system that's entirely peer-to-peer with no third-party trusted." This now-famous paper on Bitcoin.org in the name of "Bitcoin is a Peer to-Peer electronic Cash System," would eventually become the Magna Carta for how Bitcoin operates today.1


Jan. 3, 2009


It is the first Bitcoin block is mined - Block 0. Also known as the "genesis block" and is accompanied by the text: "The Times 03/Jan/2009 Chancellor is on the verge of a second bailout for banks," may be to show that bitcoin was mined in the following year, and may also be a political commentary.8


Jan. 8, 2009


The initial version of the Bitcoin software has been announced via the Cryptography Mailing List.


Jan. 9, 2009


Block 1 is processed, and Bitcoin mining starts to ramp up.


Who Is Satoshi Nakamoto?


The mystery of who developed Bitcoin in the first place, or at all, it's not clear. Satoshi Nakamoto is the name for the individual or group of individuals who released the original Bitcoin white paper back in 2008 and developed the original Bitcoin software that was released in 2009.1 Since it was released, many people have either claimed to be or have been reported to be authentically the people behind this pseudonym. However, as of November 20, the authenticity (or people's identities) that are associated with Satoshi Nakamoto remains obscured.


While it's tempting believe the media's spin that Satoshi Nakamoto is a single, quixotic genius who created Bitcoin out of thin air, these innovations do not typically happen in the absence of. All major scientific discoveries, regardless of their apparent novelty have been based on conducted research.


There are a few precursors to Bitcoin Adam Back's Hashcash, invented in 1997. This was followed by Wei Dai's Bitcoin, Nick Szabo's bit gold, as well as Hal Finney's Reusable Proof of Works. Aside from that, the Bitcoin white paper itself refers to Hashcash and bmoney as well along with other works that span diverse research areas. Not surprisingly, a lot of these people who work on the different initiatives mentioned above have been believed to have played a an influence in the creation of Bitcoin.


There are a few possible reasons for Bitcoin's inventor to remain anonymous. Privacy: As Bitcoin has grown in popularity--and is becoming known as a global phenomenon --Satoshi Nakamoto could attract lots of attention from media outlets and from the government. Another reason is the possibility for Bitcoin to cause a major disturbance to the current financial and banking systems. If Bitcoin could gain widespread acceptance, it may surpass the nation's sovereign fiat currencies. The risk for existing currencies could cause governments to pursue legal steps against Bitcoin's creator.


Another reason is security. As of 2009, 32,490 of the blocks were mined. according to the reward percentage in the range of 50 Bitcoin per block. payout for 2009 was 1 624,500 Bitcoin.9 One could conclude that only Satoshi and possibly other people were mining in the year and are in possession of the majority of that cache of Bitcoin.


Anyone who has that much Bitcoin could be a crime target, especially due to the fact that Bitcoin differs from stocks and more like cash where the private key needed for approving spending can be printed and hidden in a mattress.


Although it's possible that the creator of Bitcoin will have the foresight to make any extortion-induced transfers identifiable, keeping your identity private is an effective way for Satoshi Nakamoto to limit exposure.


Special Aspects


Bitcoin as a type of payment


Bitcoin is accepted to pay for services or products that are offered. Brick and mortar shops may have an announcement that reads "Bitcoin Is Accepted" It is possible for transactions to be carried out using the necessary hardware terminal , or wallet addresses via QR codes and touchscreen apps. A website can readily accept Bitcoin by adding this payment option to its other payment options on the internet including credit card, PayPal, etc.


El Salvador became the first country to officially recognize Bitcoin as a legal tender in June 2021.10


Employment opportunities for Bitcoin


Self-employed people can receive a salary for any job that is related to Bitcoin. There are a variety of ways to do this that include creating an website, and then adding you Bitcoin accounts to the site in order to make it a way to pay. There are numerous job boards and websites dedicated to digital currencies:


* Jobs4Bitcoins a part Reddit.com.


* BitGigs describes itself as "a Bitcoin job board."


* Bitwage offers a way in which you can choose a portion of your work paycheck to be converted to Bitcoin and then sent at the Bitcoin address.


The idea of investing in Bitcoin























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How do I buy Bitcoin





Many Bitcoin supporters believe that digital currency is the way of the future. Many who support Bitcoin believe it facilitates fast, low-cost payment system for transactions across the world. While it isn't backed by any government or central financial institution, Bitcoin can be exchanged for traditional currencies; in fact, the rate of exchange against dollars attracts potential trader and investors keen on the currency market. In fact, one major reason for the rise of digital currencies like Bitcoin is that they can be used as an alternative to government-issued fiat currency and conventional commodities like gold.





In March 2014 in the month of March, the IRS declared that all virtual currencies such as Bitcoin will be taxed on as property and not currency. Losses or gains from Bitcoin used as capital will be reported as capital gain as well as losses, whereas Bitcoin is used to store inventory and will generate ordinary losses or gains. The selling of Bitcoin that you purchased or mined from a different party, or an use for Bitcoin to purchase items or services, are examples of transactions that can be taxed.11





Just like any other asset the principle of purchasing low and selling fast applies to Bitcoin. The most well-known way of collecting the currency is purchasing from an Bitcoin exchange, but there are other ways to earn money and own Bitcoin.





Risques Associated with Bitcoin Investing


Investors who are speculative have been attracted to Bitcoin after its explosive rise in price in recent years. Bitcoin was worth $7,167.52 at the time of December. 31, 2019, and , a year later the price had risen by more than 300% to $28,984.98. The price continued to rise in the first half of 2021, reaching a record high of over $68,000 on November 2021.12





So, many buy Bitcoin to invest in its value as opposed to its capability for use as a mode of exchange. But, the lack of guaranteeing value and its digital nature makes its purchase and use come with a range of inherent risks. Many investor alerts have been put out by Securities and Exchange Commission (SEC) as well as the Financial Industry Regulatory Authority (FINRA) and the Consumer Financial Protection Bureau (CFPB) and various other agencies.





The concept of a virtual currency is not yet fully developed and as compared to traditional investments, Bitcoin doesn't have much of a long-term track track record or evidence of reliability to back it. As it gains popularity, Bitcoin has become less and less experimental each day. However, within the first decade of its existence, all digital currencies are in a stage of development. "It is by far the highest risk, highest return investment which you could possibly make," says Barry Silbert who is the CEO of Digital Currency Group, which is a company that invests and creates Bitcoin and Blockchain companies.13





Risks to the regulatory system


If you are thinking of investing your money in one of Bitcoin's numerous guises is not for the risk-averse. Bitcoin is a competition against the government's currency and could be used in underground market transactions including money laundering, illegal crimes, or tax evasion. This is why governments could try to restrict, regulate, or ban the use and transaction of Bitcoin (and some already do). The other groups are working on different rules.





For example, in 2015 for instance, in 2015 the New York State Department of Financial Services came up with regulations that would require companies dealing with the buying, selling and transfer of funds or the storage of Bitcoin in order to confirm the identity and identity of their customers. They also need to employ an official who is a compliance person, and keep reserves for capital. All transactions that cost $10,000 or more need to be noted and reported.14





The absence of uniform rules on Bitcoin (and the other digital currencies) causes questions about their reliability, longevity, and the generality of their use.





Security risk


A majority of people who have and use Bitcoin don't have tokens via mining. Rather, they buy and sell Bitcoin and various other digital currencies on any of the popular markets online which are referred to as Bitcoin trades and exchanges.





Bitcoin exchanges are digital . And, as with any other device--are prone to attack by hackers or malware as well as operational problems. If a thief gain access to a Bitcoin owner's computer hard drive and takes their encryption key private and their Bitcoin address, they may be able to transfer money stolen from Bitcoin to a different account. (Users are protected from this by ensuring that their Bitcoin is saved on a computer that is non-internet connected, using paper wallets and printing the Bitcoin private addresses and keys, but not keeping their Bitcoins on a laptop computer at all.)





Hackers also have the ability to attack Bitcoin exchanges, getting acces to thousands upon thousands of bitcoin accounts as well as digital wallets that are where Bitcoin are stored. An especially notorious hacking event took place in 2014, in which Mt. Gox one of the largest Bitcoin exchange in Japan, was forced to shut down due to the fact that millions of dollars of Bitcoin was stolen.





This is especially problematic considering that the majority of Bitcoin transactions are permanent and irreversible. This is similar to dealing with cash in that any transaction performed using Bitcoin cannot be reversed if the person who has obtained them reimburses them. There is no third party or payment processor when using the credit or debit card. That's why there's no there is no safeguard or recourse if there's any issue.





Insurance risk


Certain investments are insured through some investments are insured through the Securities Investor Protection Corporation (SIPC). The majority of bank accounts are covered by the Federal Deposit Insurance Corporation (FDIC) within a set amount , which is determined by the location.





It is generally accepted that Bitcoin marketplaces and Bitcoin accounts are not covered under any federal or government program. In 2019, the prime marketer and trading platform SFOX announced that they would be able provide Bitcoin users with FDIC insurance, but only for the portion of transactions involving cash.15





Fraud risk


Although Bitcoin utilizes private key encryption in order to validate owners and record transactions, scammers and fraudsters could try to market fake Bitcoin. For instance, in July 2013, the SEC issued a legal complaint against an owner of a Bitcoin-related Ponzi scheme.16 There have been cases of Bitcoin price manipulation, which is a regular type of fraud.





Market


As with any investment, Bitcoin values can fluctuate. In fact, the value of the currency has experienced wildly swings in price over the span of its existence. Affected by high volumes of buying transactions on exchanges, Bitcoin is highly sensitive to any newsworthy events. In the words of the CFPB report, the price of Bitcoin dropped by 61% in only one day of 2013 and the day-long record-breaking price drop recorded in 2014 was as much as 80%.17





If less and fewer people acknowledge Bitcoin as a means of payment, these digital units may decrease in value, and even become unimportant. There was even the possibility about the possibility that bitcoin's "Bitcoin bubble" has burst since the price dropped from its all-time peak during the cryptocurrency boom in late 2017 and the beginning of 2018.





There's already plenty competition, but even though Bitcoin is a clear winner over the hundreds of other digital currency options that have appeared due to its reputation and venture capital funding an innovation in the form or a better virtual coin is always in danger.






$68,990


The Bitcoin's price record, that was set on Nov. 10, 2021.12


Splits in the Cryptocurrency Community


In the years since Bitcoin was launched, there have several instances where conflicts between groups of developers and miners has led to huge disagreements within the cryptocurrency market. In a few of these instances there have been instances where groups of Bitcoin users and miners have altered how Bitcoin operates. Bitcoin network itself.





The process is referred to by the term "forking," and it usually leads to the creation the new type of Bitcoin with a name change. The split could be a "hard fork," which means that a new coin shares the history of transactions with Bitcoin up until a decisive split period, at which time the creation of a new coin occurs. The most prominent cryptocurrencies that have been made as a result of hard forks are Bitcoin Cash (created as of the month of August), Bitcoin Gold (created in October 2017) and Bitcoin SV (created in November of this year).





A "soft fork" is a modification of the protocol which is in line with the original system rules. For instance, Bitcoin soft forks have added functionalities such as witnesses that are segregated (SegWit).





Why is Bitcoin Important?


Bitcoin's value has grown exponentially within a mere decade, rising from just $1 in 2011 and now more than $68,000 in the year 2021 as of November. Its value stems from many sources, such as its relative supply, demand for it, and marginal costs of manufacturing. As such, even though the currency is not tangible, Bitcoin commands a high price, and a market capitalization of $1.11 trillion as in November 2021.12




What is Bitcoin really a Scam?

Although Bitcoin is not real and cannot be changed, it's certainly real. Bitcoin has been in existence for more than one decade and has proven itself solid. The software that runs the system, in addition, is open source and can be downloaded and studied by anyone who wants to look for bugs or evidence that suggests a criminal motive. Of course, fraudsters could try to defraud users of their Bitcoin or hack websites such as crypto exchanges, However, these are flaws within user behavior or applications that are third party as opposed to Bitcoin its own.





How Many Bitcoins are there?


The maximum amount of bitcoins that will be produced is 21 million and the final bitcoin will be mined at some point near the year 2140. At the time of writing, November 20, 2021, over 18.85 million (almost 90%) of bitcoins had been mined.18 In addition, the researchers estimate that up to 20% of these bitcoins have been "lost" because of folks forgetting the private keys or passing away without leaving access instructions or sending bitcoins with unusable addresses.19





Should I Capitalize the B in Bitcoin?


It is standard to use a capital B when talking about the Bitcoin network as a system, protocol, or. Use a smaller B when discussing Bitcoins individually as a currency of worth (for example, I've sent two bitcoins).

Where can I buy Bitcoin?

There are numerous online exchanges that permit you to buy Bitcoin. Also Bitcoin ATMs--internet-connected kiosks with the ability to purchase bitcoins using cash or credit cards -- have been appearing across the globe. If you have a friend who owns some bitcoins, they may be willing to trade them with you straight without exchange at all.






Website: http://cqms.skku.edu/b/lecture/815049