Bitcoin in a Nutshell
Bitcoin has almost become a household name with rising media attention, and its reputation continues to grow, fair to say. Then what’s the fuss all about? Bitcoin appeared as a new form of digital currency around 2009 and was created by a clever chap named Satoshi Nakamoto from the off as an open source. We’re informed that his true identity is ‘shrouded in mystery’ like he’s some kind of Marvel superhero, I suspect it just means he’s a super nerd, but there’s no doubt, he’s a pioneer for sure… click for more info
But what’s all this about?
Bitcoin is the same as any other type of currency, except it is not under the control of any state or financial institution. The idea is for it to be owned and operated by its own party. Bitcoin is de-centralized and managed by representatives of peer-to-peer who all engage in new transaction activities and store previous activities in what are known as ‘block chains’. This implies that a complete ‘copy’ of all transactions is stored locally and used to validate new activities between participants, thus preventing any entity from malforming, inserting or creating fake transactions within the block chain. The confidentiality of Bitcoin transactions is secured by this ‘consensus’ approach.
Bitcoin functions in no different way than PayPal in that you have a digital wallet with a unique address where Bitcoins may be sent to you by individuals. On your computer, you can simply instal a wallet, or you can download the complete Bitcoin wallet and participate as a node in the network.
With risky investors playing on the highs, Bitcoin’s value is very much an outcome of supply and demand. A single Bitcoin (shown as 1.0000000) is currently worth £ 573, or $ 935. In either of the 8 decimal points, you can buy Bitcoins, so for instance, 0.0100000 will cost you £ 5.70 and 0.1000000 would cost you £ 57.00, no wonder that Bitcoin received its name!
OK, where am I going to purchase Bitcoins?
You would need to buy Bitcoins in your current currency, unless you have any Bitcoins heading your way through a payment. Buying is all about faith because it is not regulated, but that’s kind of how eBay started out where users trusted each other to pay for and send goods, and they did pretty well for themselves…