Bitcoin is a cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of
exchange using cryptography to secure the transactions and to control the creation of additional
units of the currency and a payment system is any system used to settle financial transactions through
the transfer of monetary value, and includes the institutions, instruments, people, rules, procedures,
standards, and technologies that make such an exchange possible.
Invented by an unidentified programmer, or group of programmers, under the name of Satoshi
Nakamoto. Bitcoin was introduced on 31 October 2008 to a cryptography mailing list, and released
as open-source software in 2009.
A valid transaction must have one or more inputs.Every input must be an unspent output of a
previous transaction. The transaction must carry the digital signature of every input owner. The use
of multiple inputs corresponds to the use of multiple coins in a cash transaction.
Bitcoin System
The system is peer-to-peer and transactions take place between users directly, without an
intermediary.These transactions are verified by network nodes and recorded in a public distributed
ledger called the blockchain (The blockchain is a public ledger that records bitcoin transactions).
Privacy
Bitcoin is pseudonymous, meaning that funds are not tied to real-world entities but rather bitcoin
addresses. Owners of bitcoin addresses are not explicitly identified, but all transactions on the
blockchain are public.
Criminal activity
The use of bitcoin by criminals has attracted the attention of financial regulators, legislative bodies,
law enforcement, and the media.The FBI prepared an intelligence assessment, the SEC has issued
a pointed warning about investment schemes using virtual currencies, and the U.S. Senate held a
hearing on virtual currencies in November 2013.Several news outlets have asserted that the
popularity of bitcoins hinges on the ability to use them to purchase illegal goods. In 2014,
researchers at the University of Kentucky found robust evidence that computer programming
enthusiasts and illegal activity drive interest in bitcoin, and find limited or no support for political
and investment motives.
Other Risks
Data in the blockchain ,while it is possible to store any digital file in the blockchain, the larger the
transaction size, the larger any associated fees become. Various items have been embedded,including
URLs to child pornography.
The documentary film, The Rise and Rise of Bitcoin (late 2014), features interviews with people
who use bitcoin, such as a computer programmer and a drug dealer.
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