What is Bitcoin?
The USA have a dollar, The UK – pound, China – yuan, the Internet has its own currency as well – Bitcoin (BTC). This new currency is a unique and very useful one. People start using Bitcoin volunteered for paying, as well as keeping the money. In fact, Bitcoin is a kit of rules (protocol) where computer programs can exchange virtual money. To start using this currency, you only need to install one of the many free programs purses.
Satosi Nakamoto created Bitcoin in 2009. «Bitcoin» applies to software (purse), the network and coin inside this network. Software of purse is free-source, so every person has a chance to see how it works.
Bitcoin has some differences among others electronic rates. So that:
Bitcoin does not have particularly place of its issuing and controlling, which could change its course, the number of coins on the Internet etc. The main principle of this network is peer-participants. Is someone can check your money? No, he is not. No one can influence on your account (for example to freeze), on your transfer (to cancel) or stop someone from sending and or receiving money as well.
2. Limited number of coins are on the Internet.
Emission is limited, and all market players know its course beforehand. All number of monetary units does not exceed 21 000 000. Volume increases as the sum of a decreasing geometric progression and approaches a maximum value asymptotically. Coins appear in the batches approximately every several minutes, the number of coins in a stack now - 25 and it is decreased every 4 years. First time when number of coins was decreased from 50 to 25 took place on 28 November 2012. It is expected deflation in the future, which is not a poser, because the currency is divided up to the 8th decimal place.
Everyone can make payments directly, without the mediation of any financial institutions. Abolishment of payment is impossible. Information about the payer-committed payment applies across the network and is accepted by all the other representatives of the network. Improper payments are rejected. Fees in most cases are not subject to mandatory commission, but the commission may be paid voluntarily to hasten the processing of the transaction.
As we can see, Bitcoin is not only e-currency. Moreover, it is e-gold: resources are depleted, the more it is elaborated - the harder it is to make more. According to the theory the value of coins multiplies with time, it is impossible for the same coins to buy something twice, algorithms and cryptographic protection system that will not permit. However, unlike the real gold, Bitcoin has several advantages. One of the most significant vantage is speed of transactions that is not required to go to another continent with a bag of gold, the transaction can be done even using a mobile phone.