By now, you have most likely heard of Bitcoin, the “first decentralized digital currency,” in the world. Created in 2009, the peer-to-peer currency used for instant electron payment. It is ideal for conducting international transactions because it is not subject to exchange rates or transactions fees, as it can be bought and sold on an exchange in return for the local currency. Though not the only crypto-currency, it certainly is the one that has drawn the most attention, and for good reason. In February 2013, one bitcoin would have cost you , as of this writing one bitcoin goes for about 0. Talk about a pretty good return on investment. So how does it work?
1. Who issues bitcoins?
Bitcoin has no central monetary authority. The creators have fixed the supply of bitcoins to around 21 million, and no new bitcoins can be added into the supply. Therefore, theoretically, a bitcoin can’t be devalued. The system is based on a deflationary economic model. As time progresses, the available supply of bitcoins will decrease, eventually reaching its limit near 2140. As a result, the value of each bitcoin will rise in the long run, or so the argument goes.
2. How are they distributed?
Computers operating within a peer-to-peer computer network mathematically generate the currency. Known as Bitcoin “mining,” the network approves a user’s updates around every 10 minutes, and a fixed number of bitcoins is provided to the user. The system was developed so that as time progresses, it becomes more challenging to mine the bitcoins. As a result, people must continue to build powerful and massive computers to aquire the currency.
3. Who buys bitcoins and how can they be purchased or sold?
Bitcoins can be purchased (and sold) by anyone who holds traditional currency. Remember, Bitcoin is a digital currency. Though some physical bitcoins exist, each is linked with a distinct identification tag backed by real digital bitcoins embedded inside. In order for the owner to access the funds, the coin’s hologram must be stripped away to reveal a redeemable “private key.”
The owners of the physical coins and those online can conduct transactions at several worldwide exchanges, or directly between peers through software. Since Bitcoin can be bought and sold directly through the exchanges in return for a country’s local currency, it is ideal for conducting international transactions without having to use exchange rates or pay bank fees.
While it reduces costs, the ease of the transactions, combined with the complexity of the Bitcoin system, has made Bitcoin attractive to individuals conducting illicit activities. Last month, a PolicyMic article detailed the prevalence of Bitcoin transactions on the (now closed) Silk Road market place.
4. Who accepts bitcoins as a means of exchange?
Via: Virgin Galactic
Over the past year, there has been a substantial increase in the number of merchants accepting Bitcoin as a valid method of payment. In fact, you can even buy a trip to space with Bitcoin. Around the U.S. many small and local businesses are beginning to accept the currency. Additionally, companies such as BitPay enable businesses to accept bitcoins as payment and then receive final payments in local currency. The service acts an intermediary, confirming the Bitcoin payment and paying the merchant in the local currency.
A similar service, Coinbase, just raised million in a Series B round led by the venture capital firm of Marc Andreeseen, the co-founder of Netscape. The company provides services not only for merchants, but also for consumers. It has digital wallets, allowing users to purchase and sell bitcoins in addition to spending them. The company has over 600,000 users and has signed up over 16,000 merchants who will accept bitcoins through Coinbase. Yet small businesses aren’t the only ones who accept the currency as payment.
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BITCOIN – Big Business & Corporations Now Adopting Bitcoin
Imagine a world in which you can buy anything in secret. No banks. No fees. No worries inflation will make today’s money worth less tomorrow.
The digital currency Bitcoin promises all these things. And while it’s far from achieving any of them ? its value is unstable and it’s rarely used ? some have high hopes.
“There will be alternatives to the dollar, and this might be one of them,” said former U.S. congressman Ron Paul. If people start using bitcoins en masse, “it’ll go down in history as the destroyer of the dollar,” Paul added.
Alex and Max Keiser continue on the topic of rigged global markets and fiat currency vs bitcoin.
A man who was traveling through Manchester, New Hampshire was stopped and harassed by the TSA after he opted out of going through a body scanner. The official reason for further interrogation, according to the screeners, was “We saw Bitcoin in your bag and need to check.”
Bitcoin refuses to flip: Virtual currency stays strong despite bankruptcies, gyrating rates The March report revealed that a National Science Foundation researcher got the boot for using his access to supercomputers to mine Bitcoin: We received reports describing a researcher’s abuse of NSF-funded supercomputing resources at two universities to conduct bitcoin mining activities. Bitcoin is a virtual currency that is independent of national currencies, but it can be converted into traditional currencies through exchange markets. It is generated or “mined” through a process that is by design computationally intensive.
The researcher isn’t the first to use access to other people’s powerful computers to play virtual currency miner. A student at London Imperial College and a researcher at Harvard University both got in trouble earlier this year for using their fine establishments’ computers to mine Bitcoin’s funnier cousin, Dogecoin. Last year, New Jersey fined a gaming company one million dollars for secretly turning its gamers’ computers into Bitcoin mining slaves. bitcoin “accept bitcoin” gold silver “sell gold” “bitcoin trading” “cloud hashing” money cash investment investing “stock market” trading apple “app store” app android wealth wealthy iphone corporate business “no fees” ebay paypal “forex trading” “venture capital” startup 2014 u.s. “united states” usa america tax “tax refund” irs “bank account” banking savings “savings account” interest media entertainment news “agenda nwo” “bitcoin mining” litecoin “day trader” “mike maloney” currency “digital currency” “online wallet” “iphone app” negative interest rate central bank jsnip4 demcad rawdoglet rawdogletard gold cash wealth louis farrakhan alex jones infowars gerald celente rich dad poor dad Robert Kiyosaki the secret dvd positive thinking banker suicide max keiser altcoins mining rig graphics card jim rogers lindsey williams global reset elite nwo agenda
If you’re a European reading this story outside the Eurozone, or perhaps a resident of Hong Kong or Russia, the reverse may be true: A majority of your compatriots may not have heard of Bitcoin, but anyone sophisticated enough to have read up on it now likely owns some. As Bitcoin enters its fifth year in the wild, its largest concentrations of users can now be found not in the U.S. ? which enjoys a stable banking system and a galaxy of existing mobile payments services ? but rather in places where Bitcoin’s core offerings ? a hedge against inflation, a means of quickly executing transactions over long distances ? can actually be tapped into.
“The reality is that in North America, consumers have access to a fairly decent set of financial services,” Peter Smith, COO of Bitcoin wallet firm Blockchain, told BI in an email.” On a currency basis, RMB-denominated Bitcoin trades now outrank USD despite a seemingly never ending stream of threats out of the People’s Bank’s of China that they’ll end all transactions.
In a landmark monetary policy move, the European Central Bank (ECB) has announced negative interest rates. The ECB will charge an interest rate of -0.1% to banks wishing to store euros within central bank vaults. Domestically, the intention is to prod banks into lending money to businesses as opposed to buying government bonds.
John Donahoe, president and CEO of eBay Inc. was talking about his company’s future with digital currencies on CNBC. In the interview, he once again offered positive words about the future of technological advancements in money. ‘I think there’s no doubt digital currency is going to play an important role going forward, and at PayPal, we’re going to have to integrate digital currencies into our wallet.’
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