What is Bitcoin?

This 'experimental virtual currency' project is becoming one of the hottest topics of the technology world as well as the economic world.

In the afternoon of January 3, 2009, with a click on the computer keyboard, a programmer (or a group) under the nickname Satoshi Nakamoto gave birth to Bitcoin - a virtual currency of digital technology. Bitcoin does not exist in any physical form, no paper, no gold nor silver, simply bits of information generated from 31,000 lines of code. Bitcoin carrying the desire to become a currency can overcome the limitations of physical currency, a currency of technology of the future.

What is Bitcoin?

Bitcoin (symbol: BTC, XBT) is a decentralized digital currency, issued by Satoshi Nakamoto in the form of open source software since 2009. Bitcoin can be exchanged directly with connected devices. Internet without going through an intermediary financial institution.

The appeal of Bitcoin

The entire Bitcoin system operates on open source and is based on peer-to-peer capabilities, without intermediaries. Therefore, Bitcoin is more reliable than physical currencies. People cannot steal Bitcoin, nor can it destroy it. Bitcoin is also not affected by the finances of a country or the infrastructure behind that finance. The factor that turns Bitcoin into an attractive currency is anonymity. When exchanging Bitcoin, you don't need to reveal your identity. Compared to exchanging physical currency, Bitcoin is too ideal for the period of modern internet.

Can Bitcoin become an official currency of the world? (Source: ZACH COPLEY - FLICKR).

Currently the world has a movement of 'exploiting' Bitcoin. In order to operate the 'mining' algorithm that requires processing from computers, many people have chosen to build 'Bitcoin mining camps' with clusters of computers that continuously operate Bitcoin software. These computer clusters use GPU graphics cards instead of microprocessor chips because of better performance and cost ratio.

Even a new type of computer hardware called ASIC has been built just for 'mining' Bitcoin. Bitcoin is also attracting attention from major economic investors, including Winklevoss twins - famous for their legal battle with Facebook founder Mark Zuckerberg. Big investors along with Bitcoin mining pioneers are holding large amounts of Bitcoin. With the current exchange rate, 1 Bitcoin can be exchanged for USD 4500, a record number (as of August 18, 2017).

The potential of fraud

Bitcoin is also its weaknesses. The most interesting thing is that until this point, there is still no one standing behind Bitcoin. Satoshi Nakamoto is a very likely nickname of not one but many developers are anonymous. Whether Bitcoin's concept is credible or not, no one knows. It is possible that Bitcoin is a spectacular trick and millions of dollars of value are completely non-existent. Meanwhile, the anonymity behind Bitcoin's transactions opens up legal risks. Many people fear the freedom of Bitcoin will inadvertently assist in illegal activities.

But the biggest weakness of Bitcoin is its fledgling. On April 11, some people own a large amount of Bitcoin decided to give away quite a bit of Bitcoin, immediately lowering the price suddenly Bitcoin. The world's largest Bitcoin trading market is Mt.Gox, which also announced they are slowing down DDoS attacks and interrupting transactions. Bitcoin exchange rate dropped from over 200 USD to about 100 USD.

In addition Bitcoin still has the potential to be a fraud on the Internet. The proof is that after the DDoS attack, the Mt.Gox trading market decided to close the transaction to maintain, immediately a series of phishing moves, from spoofing Mt.Gox's website to the Spam email to lure Bitcoin owners. Types of malware targeting Bitcoin appropriation are also gradually increasing in number. Bitcoin's source code is open source so anyone can find a way to 'crack' them. Generally, Bitcoin is not perfect and requires security and management measures specifically for this currency.

Bitcoin is not perfect and requires security and management measures specifically for this currency.

Future

However, Bitcoin is still considered to have great potential. Most recently, Wordpress blog service claims to receive Bitcoin in its transactions. Wikileaks - the organization that specializes in the release of confidential information, has also accepted donations with Bitcoin to avoid being blocked by governments that have an interest in the organization. Silk Road, an online trading service also accepts Bitcoin as currency for trading. Many individuals also accept Bitcoin to pay for software design, programming . on freelance work forums. However, there are still not many big services or companies that accept Bitcoin.

Whether Bitcoin becomes the common currency of the internet, can only wait for the answer in the future.

How to make Bitcoin money

Each Bitcoin can only be created during the process of 'exploiting' using a software that runs on the computer. Bitcoin mining software will constantly run to 'find' a Bitcoin. The problem is that software operators will have to 'race' with each other to see who 'finds' Bitcoin first. Every 10 minutes there will be only 25 Bitcoin created worldwide and this number is programmed to decrease to 0 by 2140. Transactions will be encrypted using SHA256 algorithm, meaning there is no way (present) to make Bitcoin fake or hack Bitcoin accounts.