Fact Box: Bitcoin

Aug 11, 2017 11:39 IST

Virtual Currency Bitcoin was in news in May-June 2017 after a massive ransomware attack triggered by the WannaCry virus affected systems in over 100 countries. The cyber criminals demanded a fee of about USD 300 in crypto-currencies like bitcoin for unlocking affected devices.

It has also been in the news for a sharp rise in its price. Today on 11 August 2017, the digital exchange rate of Bitcoin is USD 3453.10. However, a year before that is in August 2016, it was priced around USD 600.

Virtual Currency Bitcoin

Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto. Later, Nakamoto dropped off as bitcoin began to attract widespread attention.
Bitcoin is a digital currency that is not tied to a bank or government and allows users to spend money anonymously.
The coins can be bought and sold on exchanges with US dollars and other currencies.
Bitcoins are basically lines of computer code that are digitally signed each time they travel from one owner to the next.
The currency has become popular enough that more than 300000 daily transactions occur now.
Bitcoin is traded through Blockchain Technology, a financial ledger maintained by a network of computers that can track the movement of any asset without the need for a central regulator.
The blockchain prevents the sale of the same bitcoin twice, and the bitcoin miners, who keep a track on blockchain, are rewarded for their efforts by being gifted with the occasional bitcoin.
Mining bitcoins means using a computer program to solve mathematical problems to verify various bitcoin transactions around the world.
Bitcoins are saved in bitcoin wallet. But, if you lose bitcoin wallet, your bitcoins are lost forever.
There are finite number of bitcoins in existence. Presently, there are exactly 21000000 bitcoins.
The exceptional thing about Bitcoin is that it is completely transparent in terms of transactions.
Bitcoin’s recent surge is attributed to the increase in demand for other cryptocurrencies such as litecoin, peercoin, namecoin, ether and primecoin through initial coin offerings (ICOs).
First recorded purchase through bitcoin was made for buying USD 25 pizza against 10000 bitcoins on 22 May, which is now observed as Bitcoin Pizza Day.
Bitcoin has also been sent into outer space in 2016 by Genesis Mining company through a 3D bitcoin model and bitcoin paper wallet, which were tied to weather balloon.
In 2017, market saw the arrival of a new crypto-currency called Bitcoin cash which is created by splitting bitcoins.
The main difference between bitcoin and bitcoin cash is the increase in the block size and code. For instance, the block size of a bitcoin is 1 MB while bitcoin cash has a block size of 8 MB.
With this split, Bitcoin now exists on both blockchains in parallel, resulting in two versions of the cryptocurrency.
The surge in Bitcoin trade has engulfed various Governments and banks.
Banks are at threat with Bitcoin and Blockchain as more and more firms are building systems that can create and exchange ‘blocks’ completely legally without the need of banks.

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