BITCOIN, New currency, a digital currency

Bitcoin is an open source peer-to-peer electronic money and payment network introduced in 2008 by pseudonymous developer “Satoshi Nakamoto”. Bitcoin has been called a cryptocurrency because it uses cryptography to secure transactions. Digitally signed payment messages are broadcast to and verified by the network.

Specialized computers use a proof-of-work system to prevent double-spending, a problem for digital currencies. The operators of these computers, known as “miners”, are rewarded with transaction fees and newly minted Bitcoins.

Bitcoins are stored by associating them with addresses called “wallets”. Wallets can be stored on web services, on local hardware like PCs and mobile devices, or on paper print-outs. Thefts of bitcoins from web services and online wallets have been covered in the media, prompting assertions that the safest way to store bitcoins is in a paper wallet.

However it is impossible to prove that the producer of a banknote or a coin had destroyed the private key after the end of a printing process and doesn’t preserve it.

Therefore this sort of storage is insecure and is a subject for a fraud, unless it was printed by the owner of a wallet himself with a verified software and on uncompromised computer. [http://en.wikipedia.org/wiki/Bitcoin]

Frequently Asked Questions about Bitcoin. Click the link. [http://bitcoin.org/en/faq#who-controls-the-bitcoin-network]

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One thought on “BITCOIN, New currency, a digital currency

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