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What is bitcoin?

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bitcoin-2007769_1280Bitcoin price crashed to $11,727.50 on Friday (Jan 19). The price of the much-hyped cryptocurrency had been on declining mode since the past one week.

It traded at $11,727.50 on Friday on Luxembourg-based bitcoin exchange BitStamp.

On Jan 6, it traded at $17,500 but continued to slip till it reached as low as $9,200 per coin recently.

This craze renewed in the Indian market when in December a news broke that megastar Amitabh Bachchan and his actor-son Abhishek Bachchan, who had invested in cryptocurrencies, got their $250000 investment in Meridian Tech shoot to $17.5 million in value within days due to the rising value of Bitcoins.

However, it’s prices soon started falling and many Bitcoin experts saw the fall post December 2017 as the beginning of a “real” crash, while there are others who believe it’s just a typical seasonal event.

Here is everything that you need to know about bitcoins:

1. Bitcoin is a cryptocurrency, an digital asset working as a medium of exchange that uses cryptography to secure its transactions.

2. This cryptocurrency is the first decentralized digital currency. It is a worldwide payment system that works without a central bank or single administrator.

3. Invented by an unidentified person/group under the name Satoshi Nakamoto, bitcoin was released as open-source software in January 2009 on SourceForge.

4. It was on Aug 18, 2008 that the domain name “bitcoin.org” was registered.

5. In November 2008, a link to a paper authored by Satoshi Nakamoto – “Bitcoin: A Peer-to-Peer Electronic Cash System” – was posted to a cryptography mailing list.

6. The bitcoin network came into existence in January 2009 after Satoshi Nakamoto mined the first ever block on the chain – the genesis block. Pertinently, bitcoins are rewards for a process called mining and can be exchanged for other currencies, products and services.

7. This cryptocurrency network is peer-to-peer (P2P) and it allows users to do transactions directly.

8. All transactions are not only verified by network nodes through the use of cryptography, but are also recorded in a public distributed ledger called a blockchain.

9. Transaction fee is optional while dealing with this cryptocurrency. Miners get the upper hand for choosing which transactions to process. Fees are based on storage size of the generated transaction.

10. This cryptocurrency wallet is a place where miners store all information pertaining to bitcoins and their transactions. Bitcoins can be stored in such online wallets.

11. Regarding financial privacy, bitcoin is pseudonymous as the funds are tied to bitcoin addresses. Though owner identities cannot be easily identified, all transactions on the blockchain are public.

12. Till February 2015, over 1,00,000 companies accepted bitcoin as a mode of payment.

13. There are approximately 15 million bitcoin blockchain wallet users as of September 2017.

Sreya Basu

Sreya is based in Kolkata. She is a Senior Editor of Big Wire.

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