What is Bitcoin?

Posted: March 29, 2012 in Capitalism, Ciber

http://www.weusecoins.com/

https://en.bitcoin.it/wiki/Bitcoin

Bitcoin

Bitcoin is a decentralized cryptocurrency invented by programmer Satoshi Nakamoto, who also developed the Original Bitcoin client. It allows for pseudonymous and secure ownership and transfers of amounts of bitcoins, without relying on any central server to process the transactions or store the accounts.

Bitcoin is currently accepted in exchange for other currencies, such as dollars and euros, as well as directly for services and tangible goods.

Contents

[hide]

History

Main article: History of Bitcoin

The first mention of the concept of cryptocurrency is said to have been made in 1998 by Wei Dai on the cypherpunks mailing list, and Bitcoin can trace its origin to the B-money Proposal. Related to this is the more recent Bit Gold proposal by Nick Szabo.

The paper Bitcoin: A Peer-to-Peer Electronic Cash System describes the early concepts behind Bitcoin[1] and and precedes the first release of Bitcoin software.

The Bitcoin project was registered on November 9th, 2008. The Bitcoin network started up on January 3rd, 2009 with the genesis block. The genesis block contains a media reference to the dealings of a central banker in the UK.

On February 9, 2011, and for a few days afterwards, Bitcoin sold for over $1 in most exchanges.

Security

Main article: Weaknesses

In the history of bitcoin, there have been a few incidents, caused by problematic as well as malicious transactions. In the worst such incident, and the only one of its type, a person was able to pretend that he had a practically infinite supply of bitcoins, for almost 9 hours.

Bitcoin relies, among other things, on public key cryptography and thus may be vulnerable to quantum computing attacks if and when practical quantum computers can be constructed.

If multiple different software packages, whose usage becomes widespread on the Bitcoin network, disagree on the protocol and the rules for transactions, this could potentially cause a fork in the block chain, with each faction of users being able to accept only their own version of the history of transactions. This could influence the price of bitcoins.

A global, organized campaign against the currency or the software could also influence the demand for bitcoins, and thus the exchange price.

See Also

References

  1.  Bitcoin P2P e-cash paper
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s