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What is bitcoin.

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How Much Is Bitcoin Really Worth?
PARIS, FRANCE - DECEMBER 05: In this photo illustration a man holds a visual representation of the digital Cryptocurrency Bitcoin. (Photo by Chesnot/Getty Images)
It's here that I'm reminded of something Warren Buffett's often said. Price is what you pay, value is what you get.
So what value does a Bitcoin buyer get in exchange for $10,790.58 of his or her hard earned U.S. dollars? That's what I'm going to attempt to answer in this article.
Before we can attempt to value Bitcoin, we first must agree on what it is. That turns out not to be so easy.
Is Bitcoin a currency?
Describing Bitcoin as a currency seems like a natural place to begin. After all, I'm told some retailers accept Bitcoin as a method of payment. On closer inspection, however, comparing Bitcoin to a currency is like comparing lightening to a lightening bug (apologies to Mr. Clemens).
As the WSJ has noted, Bitcoin is the hottest currency that nobody is using. As Jeffrey Dorfman here at Forbes pointed out, there are two problems with Bitcoin as a currency.
First, it's too unstable. Who wants to accept something for payment that could drop in value by 25% before you have time to pour a cup of coffee? Put another way, would you accept Bitcoin as payment for a car you were selling if you had to wait 60 days to convert it to dollars? I doubt it.
Second, it's too slow. It can take days to complete a single transaction. By then, the cup of coffee you're trying to purchase is stone cold.
Bitcoin is not a currency in any meaningful sense of the word.
Is Bitcoin a store of value?
Gold apologists love to describe the precious metal as a store of value. It somehow gives the "investment" an air of sophistication. Some Bitcoin acolytes have borrowed from the same playbook to call Bitcoin a store of value.
The idea is appealing at first. They note that the U.S. dollar and other currencies are "fiat" money. In other words, there's nothing backing the value of currencies today, like gold once did. While that's also true of digital currencies, they are limited in number. The number of Bitcoin is capped at 21 million. A government can't step in and start "printing" more Bitcoin.
It reminds me of the argument people made to justify the meteoric rise in real estate values ten years ago. After all, they aren't making more land. That argument didn't turn out so well.
All of that said, one can certainly see a use for digital currencies in some parts of the world. In the U.S. we have a stable currency and banking system. That's not the case in many parts of the world, where a digital currency free from government intervention and corrupt bankers could prove very useful.
The problem, however, is that Bitcoin and other digital currencies are still not widely accepted as a medium of exchange. That they may be useful in limited circumstances and geographies doesn't, at present, make them a store of value.
So what is Bitcoin?
Bitcoin and other cryptocurrencies can best be described as potential currencies. As noted above, they are not widely accepted today as a medium of exchange. And they have significant limitations holding them back from developing into full-fledged currencies. But it's possible, though I think unlikely, that they could become more widely used in the future as a medium of exchange.
Bitcoin fanatics will take issue with all of the above. They will point to the devaluation of fiat currencies. They will hype the blockchain. They will argue that cryptocurrencies are the future. They may even try to sell you an online course, for four easy payments of $199 (U.S. dollars, not Bitcoin, thank you very much) on how to make millions in digital currency.
It still doesn't change the fact that Bitcoin has not been adopted as a useful, stable currency.
How do you value a potential currency?
The short answer is that you can't. It's impossible to assess the value of Bitcoin with any degree of reasonableness. And this is a critical limitation to understand.
It's not uncommon to pass on a potential investment because you can't determine its value. I love Amazon as a company. I have no idea what its intrinsic value is. Same goes for Tesla. So I've passed on both potential investments.
Bitcoin is far more difficult to value. It has no intrinsic value. It has a short history with wild price swings. And as of yet, it has limited usefulness.
Is Bitcoin a bubble?
The meteoric rise in its price shouldn't be confused with its true value.
In this sense Bitcoin is experiencing a classic bubble. The rise in price has motivated more buying, which in turn raises the price. The rise in price motivates more buying, and this cycle continues for a time.
Eventually the process will reverse. The price will eventually reach a peak that motivates Bitcoin owners to sell. When enough sell, the price will start to drop. The drop in price will motivate more selling, which will lower the price further.
Pain and anguish for many will be the result.
It's now 4:59 a.m. on December 7, 2017. The price of Bitcoin stands at $ 14,980.00. It's risen nearly 40% in the week since I started this article.
I hope you're not betting the rent money on Bitcoin.
And if you are still bullish on Bitcoin, here are 5 ways to invest in the digital currency.
I'm sitting at my kitchen table at 6:31 p.m. ET on Friday, December 1, 2017. The price of Bitcoin is $ 10,790.58.
PARIS, FRANCE - DECEMBER 05: In this photo illustration a man holds a visual representation of the digital Cryptocurrency Bitcoin. (Photo by Chesnot/Getty Images)
It's here that I'm reminded of something Warren Buffett's often said. Price is what you pay, value is what you get.
So what value does a Bitcoin buyer get in exchange for $10,790.58 of his or her hard earned U.S. dollars? That's what I'm going to attempt to answer in this article.
Before we can attempt to value Bitcoin, we first must agree on what it is. That turns out not to be so easy.
Is Bitcoin a currency?
Describing Bitcoin as a currency seems like a natural place to begin. After all, I'm told some retailers accept Bitcoin as a method of payment. On closer inspection, however, comparing Bitcoin to a currency is like comparing lightening to a lightening bug (apologies to Mr. Clemens).
As the WSJ has noted, Bitcoin is the hottest currency that nobody is using. As Jeffrey Dorfman here at Forbes pointed out, there are two problems with Bitcoin as a currency.
First, it's too unstable. Who wants to accept something for payment that could drop in value by 25% before you have time to pour a cup of coffee? Put another way, would you accept Bitcoin as payment for a car you were selling if you had to wait 60 days to convert it to dollars? I doubt it.
Second, it's too slow. It can take days to complete a single transaction. By then, the cup of coffee you're trying to purchase is stone cold.
Bitcoin is not a currency in any meaningful sense of the word.
Is Bitcoin a store of value?
Gold apologists love to describe the precious metal as a store of value. It somehow gives the "investment" an air of sophistication. Some Bitcoin acolytes have borrowed from the same playbook to call Bitcoin a store of value.
The idea is appealing at first. They note that the U.S. dollar and other currencies are "fiat" money. In other words, there's nothing backing the value of currencies today, like gold once did. While that's also true of digital currencies, they are limited in number. The number of Bitcoin is capped at 21 million. A government can't step in and start "printing" more Bitcoin.
It reminds me of the argument people made to justify the meteoric rise in real estate values ten years ago. After all, they aren't making more land. That argument didn't turn out so well.
All of that said, one can certainly see a use for digital currencies in some parts of the world. In the U.S. we have a stable currency and banking system. That's not the case in many parts of the world, where a digital currency free from government intervention and corrupt bankers could prove very useful.
The problem, however, is that Bitcoin and other digital currencies are still not widely accepted as a medium of exchange. That they may be useful in limited circumstances and geographies doesn't, at present, make them a store of value.
So what is Bitcoin?
Bitcoin and other cryptocurrencies can best be described as potential currencies. As noted above, they are not widely accepted today as a medium of exchange. And they have significant limitations holding them back from developing into full-fledged currencies. But it's possible, though I think unlikely, that they could become more widely used in the future as a medium of exchange.
Bitcoin fanatics will take issue with all of the above. They will point to the devaluation of fiat currencies. They will hype the blockchain. They will argue that cryptocurrencies are the future. They may even try to sell you an online course, for four easy payments of $199 (U.S. dollars, not Bitcoin, thank you very much) on how to make millions in digital currency.
It still doesn't change the fact that Bitcoin has not been adopted as a useful, stable currency.
How do you value a potential currency?
The short answer is that you can't. It's impossible to assess the value of Bitcoin with any degree of reasonableness. And this is a critical limitation to understand.
It's not uncommon to pass on a potential investment because you can't determine its value. I love Amazon as a company. I have no idea what its intrinsic value is. Same goes for Tesla. So I've passed on both potential investments.
Bitcoin is far more difficult to value. It has no intrinsic value. It has a short history with wild price swings. And as of yet, it has limited usefulness.
Is Bitcoin a bubble?
The meteoric rise in its price shouldn't be confused with its true value.
In this sense Bitcoin is experiencing a classic bubble. The rise in price has motivated more buying, which in turn raises the price. The rise in price motivates more buying, and this cycle continues for a time.
Eventually the process will reverse. The price will eventually reach a peak that motivates Bitcoin owners to sell. When enough sell, the price will start to drop. The drop in price will motivate more selling, which will lower the price further.
Pain and anguish for many will be the result.
It's now 4:59 a.m. on December 7, 2017. The price of Bitcoin stands at $ 14,980.00. It's risen nearly 40% in the week since I started this article.
I hope you're not betting the rent money on Bitcoin.
And if you are still bullish on Bitcoin, here are 5 ways to invest in the digital currency.

admin

Bitcoin (BTC)
Market Cap Volume 24h Circulating Supply Maximum Supply $ 149,506,380,242 17,991,838 BTC $ 12,183,460,809 1,466,177 BTC 17,991,838 BTC 17,991,838 BTC.
Bitcoin Price and Value.
The original Satoshi whitepaper states and its core code assures the limited number of coins in circulation will never be more than 21 million, which is estimated to be produced by 2140. Those wanting to get their hands on bitcoins will have to do so by either mining them, buying them, or earning them. Bitcoin price is still mostly governed by the law of supply and demand just like traditional currencies. This means that the price will rise when the demand is high and drop as the demand wanes. You can find Bitcoin live charts here.
Bitcoin price can behave in an unpredictable manner that goes with the novelty of the market itself. Its coin market capitalization is still small compared to heavy hitters among the fiat currencies. Bitcoin market capitalization surpassed USD 300 billion in December 2017, when Bitcoin price hit almost USD 20,000, and dropped to almost USD 100 billion in the summer of 2018.
Due to these fluctuations, trading with these virtual coins should not be approached lightly. At the same time, trading is hardly a gambling affair and you can still make sense out of buying and selling it with a bit of learning and a healthy dosage of common sense.
The most popular platforms to start trading are cryptocurrency exchanges. As you have to keep tabs on those volatile prices, this price tracker could be of help.
Currently, Bitcoin adoption is slow due to relatively high transaction fees. The research is done to reduce these fees e.g. Lightning Network.
As expected, the Global impact of bitcoins has spawned a number of similar projects that try to solve Bitcoin problems or apply crypto ledger to solve other issues. Projects which did make it, such as Ethereum (Ether, ETH - used for smart contracts) or Litecoin (LTC, used for fast and cheap transactions) have all spawned their coins which may or may not actually compete for the same turf as bitcoin.

admin

What is Bitcoin Halving? Complete Gu > Robert Devoe on March 20, 2018 / 0 Comments.
Every four years or so, bitcoin undergoes an important event known as the "bitcoin halving". This first happened in 2012, and again in 2016. Likewise, it will happen again sometime in 2020 and 2024. What is the bitcoin halving? What impacts does it have on the economics of bitcoin? In this article, we're going to go over what the bitcoin halving is, and why it's so important to bitcoin.
Understanding Bitcoin Mining Rewards.
Each day, many untold thousand watts of electricity are committed towards bitcoin mining. People mine bitcoin because they hope to earn bitcoin, which has value and can be bought and sold in various markets.
Without going into too much detail, mining is the process by which the network is secured and transactions are processed. In order to encourage people to mine bitcoin (or other cryptocurrencies that also use proof of work mining), each block contains a reward. That reward is released to the miner that successfully solves the block. This reward needs to be high enough so as to be a strong incentive. But the reward also cannot be too much. A large reward would cause an oversupply and lower the value of the currency.
What is the Bitcoin Halving?
When Satoshi Nakamoto created bitcoin, he wanted to create a system that would be self-sustaining and that would in some ways emulate gold-mining. That being, over time, mining would become more difficult and the rewards collected would slowly reduce so as to control the supply. Specifically, Nakamoto writes:
Nakamoto's solution to this problem is to institute a bitcoin halving system. Here's how it works. When bitcoin started, the block reward was a whopping 50 bitcoin every 10 minutes. The bitcoin code includes a statement which says that after every 210,000 blocks (or about four years, given 10 minutes per block) this reward should drop by half. Following the last two bitcoin halvings, the current block reward is now 12.5 bitcoin. In the year 2020, it will be 6.25, and so on.
In this way, the bitcoin halving has a number of important effects on the network.
First, it extends the life of the reward system. If we were still releasing 50 bitcoin every 10 minutes, then we would reach the maximum supply cap of 21 million bitcoin rather quickly. In fact, mining rewards would cease in about 8 years. Reducing the reward rate over time slowly means that there will be a longer period of time in which mining results in receiving a block reward.
Secondly, bitcoin halving helps bitcoin see steady price increases over time. This is because the number of new bitcoin that appear each year will be decreasing. This limited supply causes bitcoin prices to increase, as their scarcity also increases proportionally.
Finally, the bitcoin halving increases the cost of mining each individual bitcoin. As the network difficulty increases over time, and the reward rate drops, the actual cost of mining each bitcoin increases, which then causes the trading price of each bitcoin to increase as well.
The Day the Mining Stops.
With this in mind, this leads us to a logical question. What happens when the bitcoin reward drops to zero? Will everyone simultaneously stop mining bitcoin, causing the network to come to a complete stop?
To address this concern, we have to consider a few different things.
First, at the current mining rate and factoring in for future bitcoin halving events, it is estimated that the final block containing bitcoin will be mined sometime in the year 2140. Considering that the network started operation in 2009, this means that the network will have a total of about 130 years before this event occurs. By that time, the economic conditions of cryptocurrency could be so fundamentally different that the need for a block reward may not even exist.
The second thing to consider is that bitcoin miners have a secondary source of income aside from the block reward. Specifically, miners also earned transaction fees. Each day, many hundreds or even thousands of bitcoin are paid in transaction fees (depending on network conditions). So by the time 2140 rolls around, it is entirely possible that mining purely for transaction fees could be profitable enough for miners to continue mining indefinitely, regardless of their being no block reward anymore. In his widely reviewed white paper, Nakamote describes it like this:
Another point to consider is the release of new projects that plan to coexist alongside the bitcoin blockchain. One example of this is the RSK platform. RSK is a smart contract platform that is intended to run on top of the bitcoin network. It will allow for smart contract and decentralized application execution while making use of the bitcoin blockchain itself. It is intended to be a competitor to Ethereum.
One of the selling points of RSK is that miners who choose to participate in processing root stock transactions can do so while at the same time mining bitcoin as normal, with nearly no loss of efficiency. This means that in the distant future, miners could not only earn transaction fees from the bitcoin network itself, but they could also potentially earn transaction fees from these additional layer networks that may exist on top of the bitcoin network, such as RSK.
Conclusion.
With all that in mind, let's go over what the bitcoin halving really means for bitcoin. First and foremost, it's a means of controlling the amount of new bitcoin that hits the markets each day. It's intended as a way to prevent hyperinflation from ever occurring.
If we look at countries that experienced hyperinflation, one thing that often happened is the rampant and uncontrolled printing of new money. Each time a country prints more money, it is reducing the value of each individual of currency already in circulation. The bitcoin halving makes sure that not only will the rampant production of new but coins never happen, but in fact, it is mathematically required that the reverse should occur.
The bitcoin halving was also intended to emulate gold-mining, as gold-mining inevitably becomes more expensive and difficult over time, as more and more of the Earth's gold reserves are mined out. Not only does it get more expensive, but less than mask new gold enters the gold marketplace each year. This is led to a predictable and steady rise in gold prices over the last century.
Since the launch of bitcoin, many other altcoins Liberland proof-of-work mining have their own implementations of bitcoin halving. For example, Vertcoin recently underwent its own halving event, as did Ethereum Classic, which dropped its reward from 5 to 4. While other cryptocurrencies like Ethereum don't have quite the same model of supply reduction, they do employ their own methods of ensuring that the amount of new tokens hitting the market each year is slowly on the decline.
Finally, the bitcoin halving keeps bitcoin prices steadily moving upward over long periods of time. If it were not for the bitcoin halving, bitcoin today might only be worth 50 or hundred dollars each instead of the thousands that it's worth now.
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The Blockchain Diary.
Dive into a treasure house of technology informations about Blockchain, Bitcoin, Altcoins, Cryptocurrency and lot's more.
What is Bitcoin & What Does it Offer?
As I discuss in my previous article What is Cryptocurrency?, Bitcoin is a decentralized (without the need of any intermediary or a third party or a bank) cryptocurrency or digital currency on the Bitcoin Peer-to-Peer Blockchain Platform. Today, Bitcoin is being used to accept payments by major companies like Microsoft, Overstock, Namecheap, Newegg, KFC Canada, Expedia, CheapAir, etc. but most of the Bitcoins are being used in trading on exchanges, as the price of a Bitcoin skyrocketed by 2500% in late 2017.
How did it come from?
Bitcoin was created by a software developer or a group of people with a pseudonymous alias, "Satoshi Nakamoto" in late 2008 as "A Peer-to-Peer Electronic Cash System" combining Blockchain with Cryptography.
Even today, it is still a mystery who the hell this Satoshi Nakamoto really is.
Why Bitcoin?
Ok so, Bitcoin is being used and being heard, here and there, everywhere. But why? In what ways Bitcoin is different from this well long-established conservative currencies.
To know the answer of this question, you'll need to know about several important features of bitcoin which makes it different from fiat (digital) currencies.
1. Decentralized No single organization/entity controls the Bitcoin' distributed and open network.
2. Limited Total Supply Every day, new Bitcoins are being mined, but the total supply is limited to 21 million at a diminishing rate until a maximum has been reached.
3. Pseudonymous Since, there is no any "intermediary", users don't need to validate identity of each other, when making a Bitcoin transaction.
4. Immutable Also since, there is no any "intermediary", Bitcoin transactions can't be reversed, and this also means transactions can't be tempered by any one.
5. Divisible Satoshi is the smallest unit of the Bitcoin currency. It is a one hundred millionth of a single Bitcoin (0.00000001 BTC).
6. Zero/Low Fees Bitcoin transactions are very much cheaper as compared to fiat transactions. Only a few cents are require to transact a million dollar payment.
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How to Buy Bitcoin: Everything You Need to Know.
If you're even thinking of investing, read this first.
Your Bitcoin Questions Answered.
Bitcoin has been around for a decade, but the cryptocurrency became mainstream in 2017, when it became the preferred currency for ransomware payments and reached a value of more than $19,000 before crashing. Other so-called "cryptocurrencies" based on Bitcoin have had similarly shaped trajectories.
Meanwhile, the technology behind Bitcoin, known as blockchain, has become the financial and tech industries' new buzzword. Companies are rushing to adapt the technology's seemingly magical powers to every possible application, with investors rushing to get in on the Next Big Thing. (An iced-tea company tripled its stock price after it added "blockchain" to its name.)
Despite all this hype, few people really understand what Bitcoin is or how it works. We're here to fix that.
However, we can't tell you whether to invest in Bitcoin, or in any other cryptocurrency. For that answer, consult your financial adviser.
What is Bitcoin?
Bitcoin is a decentralized, digital-only currency. It has no central monetary authority. Instead, a peer-to-peer computer network keeps track of Bitcoin transactions and creates additional bitcoins through a process called "mining."
Bitcoin users and their transactions are pseudonymous; there are no international exchange rates to figure out, and there's no need for middlemen to collect fees.
Bitcoin was created in 2009, in the wake of the near-collapse of the global financial establishment and soon after an individual or group using the name "Satoshi Nakamoto" posted a paper online discussing the idea of a decentralized digital currency free from interference by governments and financial institutions. Nakamoto created the online bookkeeping system to record and track Bitcoin transactions and mined the first bitcoins.
The software to create, track, hold and exchange bitcoins is open-source, so it can be used for free.
What is the Bitcoin exchange rate?
When Bitcoin was first released in 2009, one bitcoin wasn't worth much. A single U.S. dollar could buy more than 1,300 bitcoins. As Bitcoin became more popular internationally, speculation caused the value of a single bitcoin to soar to $260 in early April 2013.
Several cyberattacks caused the value to plummet to about $50 later that month in a wave of panic selling. But in November 2013, the rate skyrocketed to about $1,200 due to Chinese speculation. At that point, the Chinese central bank took steps to prevent domestic trading in Bitcoin.
For most of 2015, Bitcoin traded between $200 and $400, but in mid-2016, the exchange rate began to move again, increasing rapidly over the following 18 months to peak at about $19,000 in mid-December 2017.
As of this writing, in late July 2019, one bitcoin is worth about $10,000. It began the year worth around $3,000, then made a steady climb through 2019 to a high of nearly $14,000 in late June. (To check on Bitcoin's price at any given time, click here.)
Its fluctuations are due, in part, to its capped amount of 21 million individual bitcoins and to its perceived value on the market.
How do you buy bitcoins?
Anyone can buy bitcoins. You'll first need to set up a Bitcoin wallet, either on a computer you control or with an online Bitcoin service. Some of the most popular services are Coinbase (perhaps the best wallet for beginners), Mycelium and Electrum. You can also find Bitcoin wallet apps in the iTunes App Store or Google Play. Most of these services will walk you through the process of setting up your wallet.
Then you'll work through a broker to buy Bitcoin. Coinbase, again, is a good starting point for beginners, but other brokers include CEX, GDAX and Poloniex. You then use a credit card, debit card or bank transfer to make the purchase. However, many card issuers in the U.S. and U.K., including Bank of America, Lloyds, Citigroup, Halifax, JPMorgan Chase, Capital One, MBNA and Discover have said they will not authorize cryptocurrency purchases.
What is Bitcoin mining?
Bitcoins can be purchased using real money, but they can also be generated or "mined." Users generate bitcoins by having their computers solve difficult mathematical algorithms that help verify the creation of new bitcoins in the blockchain -- the encrypted ledger that records and registers all Bitcoin activity -- and the transfer of bitcoins between users. The algorithms become progressively more difficult over time.
Blockchain hosts keep track of all transactions and broadcast new transactions across the host network, incrementally adding to the blockchain. Computers that are participating in the network communicate and agree on updates to the blockchain.
About every 10 minutes, a blockchain host whose blockchain updates have been approved and packaged into a block earns 12.5 bitcoins. When Bitcoin first came into being, the reward was 50 bitcoins, but the reward amount halves with every 210,000 blocks registered, equivalent to about four years.
The total number of bitcoins that can ever be mined is 21 million. The cap prevents anyone from flooding the market and devaluing the bitcoins already in circulation.
According to Blockchain.info, which provides real-time updates on bitcoins, at the beginning of 2019, there were 17.8 million bitcoins in existence, or about 85 percent of the total number possible. The projected date by which all 21 million bitcoins will have been mined is 2040.
Mining Bitcoin can be lucrative, but it requires up-front investment in robust computer-processing hardware and is not easy. Gone are the days when you could use an old computer.
Some Bitcoin miners rig up chains of high-end graphics cards normally used for computer gaming, but perhaps the best current method is to use a Bitcoin-mining application-specific integrated circuit (ASIC), which is a generic term for a computer chip designed for a specific purpose. (The "system on a chip" in your smartphone is another type of ASIC.)
Each mining ASIC is measured by its power efficiency and price per computation. Mining ASICs can cost anywhere between $400 to a few thousand dollars per unit. Higher-end models will generate bitcoins more rapidly.
Energy usage has become a major issue in Bitcoin mining. According to the cryptocurrency website Digiconomist, the electricity used for the creation of one Bitcoin blockchain block could provide a day's worth of power for 11 average U.S. households.
Once you have the hardware to mine Bitcoin, it would probably be most efficient to join a Bitcoin mining pool, in which a group works together to solve a block. You can work alone, but it will take longer and be less rewarding. To be awarded bitcoins, miners must be able to verify 1MB of transactions and be the first to compute a 64-digit hexadecimal number. Working in a pool increases the possibilities of receiving an award, even if it is shared.
For beginners or those who see mining as a hobby, it may be more worthwhile to mine for other cryptocurrencies that have lower hardware requirements than those for mining Bitcoin. Mining lesser-known cryptocurrencies, which will be discussed later in this article, can earn you the equivalent of a couple of hundred dollars a month.
What can you buy with Bitcoin?
Because of the built-in pseudonymity, bitcoins are often used for illicit activity. However, many legitimate businesses, ranging from hotels to electronic stores, accept bitcoins. Here are some of the best-known companies that accept Bitcoin as payment as of July 2019 (a more comprehensive list can be found here):
Amazon does not directly accept bitcoin, but you can use the web-browser extensions Moon and Purse to connect with Amazon sellers who accept bitcoin. Likewise, a smartphone-payment app called SPEDN lets you use bitcoin to purchase items at brick-and-mortar Barnes & Noble, Express, GameStop, Jamba Juice, Lowe's, Nordstrom, Office Depot, Regal Cinemas and Whole Foods stores.
Is using bitcoins legal?
Bitcoins aren't regulated by any government, which raises questions about their legality.
In the United States, use of Bitcoin is legal because it isn't a physical form of currency like the dollar. Were the currency to be given a physical form, like a silver dollar, the creators would be held guilty of "making, processing and selling" their own currency. Bitcoins are legal but regulated in Canada and Mexico, and legal in most of Europe as well as New Zealand and Australia.
In China, it is legal for private citizens to hold Bitcoin, but since 2014, it has not been legal for financial firms to do so. Bitcoin exchanges were banned in 2017, and the Chinese domestic currency, the yuan or renminbi, can't be used to add or withdraw funds from a Bitcoin account. In early February 2018, China said it would block access to overseas Bitcoin exchanges from within the country.
As of February 2018, bitcoins were said to be "neither legal nor illegal" in India. The country's finance ministry has stated that bitcoins will not be accepted as legal tender, but that doesn't make them illegal -- for now. Several other countries let you hold bitcoins, but won't let you use them, including Colombia, Russia, Taiwan and Vietnam.
Bitcoins are outright illegal in several countries, including Algeria, Morocco, Bangladesh, Bolivia, Ecuador, Kyrgyzstan and Nepal and Pakistan.
Is using Bitcoin anonymous?
Using Bitcoin is not 100 percent anonymous; rather, it is pseudonymous. Users can employ whatever names and handles they want. But because of the fixed and transparent nature of the blockchain accounting system, all transactions involving Bitcoin are public, and anyone can see how many bitcoins are in a given wallet.
Bitcoin "ATMs," which trade cash for bitcoins or vice versa, allow for additional anonymity. You could also use multiple wallets or mix Bitcoin services to obscure the digital paper trail, and there are other practices for hiding identity. But in the end, nothing is foolproof.
What is a blockchain?
The blockchain is the distributed digital ledger that documents all bitcoins and Bitcoin transactions, and is Bitcoin creator Satoshi Nakamoto's primary technological innovation. It is the only place where bitcoins "exist." Several times every hour, new batches of Bitcoin transactions and creations called "blocks" are registered and transmitted over the internet to all hosts of the Bitcoin blockchain.
Whenever a block is completed, it is added to the chain, creating a permanent and unalterable record. Each new block is cryptographically linked to the previous block, and changing any recorded block would create a mathematical ripple effect that would be immediately visible to all blockchain hosts. Because of this, the blockchain acts as its own ledger, similar to a bookkeeping ledger.
Because the blocks can't be altered in any way, users can validate cryptocurrency transactions without need of a third party or outside-storage source. The blockchain prevents a single unit of bitcoin from being used in two different transactions at the same time. It also allows users to remain relatively anonymous, although Bitcoin addresses are permanent.
Because it is decentralized and easily verifiable, blockchain technology can be used for other purposes. It could be used to share sensitive databases, such as gun registries or medical records, on a large scale. It could also provide a more secure way for traditional financial institutions to operate. Some blockchain advocates suggest that the technology could enable secure online voting and protect the copyrights of digital music or books.

admin

What are Bitcoin wallets?
Bitcoin transactions are processed through a Bitcoin wallet, an application that users download and install on their computers or smartphones. A purchaser or seller is identified only by his or her digital wallet's "address," a unique string of letters and numbers with a "key" (another numeric string), which only the wallet holder has.
Wallets can be set up for free and with relative ease, meaning consumers can open and close wallets at will to maintain their anonymity. One person can have multiple wallets, and multiple individuals can control a single wallet.
There are several types of Bitcoin wallets to choose from, each with its own set of pros and cons. The options include:
Desktop wallets: Software is downloaded directly to the computer, giving users full control and responsibility.
Because the Bitcoin address is kept on the computer's storage drive, no one else has access to it. But the user must ensure that there is a backup of the drive and must have a security system installed to prevent theft of the Bitcoin data. If the desktop wallet is corrupted in some way, any Bitcoins stored there are deleted and irretrievable.
Desktop wallets come as either full-size clients or light clients. Full-size clients allow the user to host and read a copy of the entire Bitcoin blockchain, which is approximately 140GB today. Light clients simply provide Bitcoin storage and require external sources to read the blockchain.
Mobile wallets: These wallets are accessed through an app on your smartphone or tablet. They can be easy to use, offering touch-screen controls and the ability to scan QR-coded Bitcoin addresses, but mobile wallets can access only a small portion of the entire Bitcoin blockchain and so are considered light clients.
Online wallets: Web-based wallets allow you to manage bitcoins through your browser. These wallets are convenient because they can be accessed at any time, and anywhere. You can't accidentally delete them, and you don't have the responsibility of backing up your holdings. However, third parties usually manage online wallets, and this involves high levels of trust and means that you have to rely on someone else to handle the security. The companies that manage online wallets often also act as Bitcoin brokers, which make money by taking a cut of every transaction they manage.
Paper wallets: Bitcoin address keys and QR codes are printed on paper or some other medium. You don't have to worry about cyberattacks stealing the information, because nothing is stored digitally, but if the paper is lost or destroyed, access to the bitcoins is gone forever.
Hardware wallets: This kind of wallet is an external device specifically designed to hold and manage bitcoins. No transaction can take place unless the hardware wallet is connected to a computer or mobile device, and access to the bitcoins held within is often protected with a PIN code. Hardware wallets are considered the most secure type of Bitcoin wallets. The downside is that it is they're not free.
What is a Bitcoin address?
Your Bitcoin address works much like a bank account number. It is a unique combination of letters and numbers, of from 26 to 35 characters, that is used to send and receive bitcoins and is connected to your Bitcoin wallet. Most users have multiple addresses tied to a single pseudonym. The "key" to the Bitcoin address is cryptographically linked to the address, and only the holder of the address should have that key.
What are Bitcoin forks?
Because there are so many players involved in mining and using Bitcoin, there is some disagreement about common rules. This has led to forks, technical actions that have separated the blockchain into new paths.
There are now more than 50 Bitcoin forks, with more on the way. The two best-known are Bitcoin Cash and Bitcoin Gold.
Bitcoin Cash was introduced in the summer of 2017, when miners wanted to move bigger blocks of memory in the blockchain. While Bitcoin moves at 1MB per block, Bitcoin Cash moves at 8MB. This allows for an increase in the rate of transactions in the ledger. The Bitcoin Gold fork occurred in the fall of 2017 and was meant to make it easier to mine money once again.
What's the link between Bitcoin and crime?
Bitcoin is often the currency of choice in cybercrime transactions, including the selling of goods such as drugs, guns, child pornography, malware and phony antivirus software; the selling of services such as botnet rentals; and the payment of ransomware ransoms. Some experts believe the growth of Bitcoin and the parallel growth of ransomware are directly related.
There was ransomware and scareware before there was cryptocurrency, but when cybercriminals used more-traditional payment methods, or even PayPal, transactions could be traced to bank accounts. The introduction of Bitcoin made it more difficult follow the thread of payments back to real-life accounts.
Cybercriminals know that their targets are becoming savvier about ransomware and are taking steps to avoid paying the Bitcoin ransom to retrieve their data. Not surprisingly, criminals have discovered new ways to "earn" Bitcoin.
They are now infecting websites and online ads with malware that turns the computers of visiting browsers into cryptocurrency-mining machines. Administrators of some websites are also doing this directly to create an additional revenue stream, and it's not clear whether it is illegal to do so without informing site visitors.
What's the deal with attacks on Bitcoin exchanges?
Criminals have set their sights on bitcoins and have attacked Bitcoin exchanges. One of the best-known attacks was the one on the Mt. Gox exchange, until then the world's largest Bitcoin exchange, in 2014.
The exchange suffered a series of DDoS attacks in February of that year that caused lags in trading and locked users out of their accounts. Shortly afterward, Mt. Gox discovered that thieves had stolen some $450 million in Bitcoin from the exchange.
Some of the money had been skimmed off over the previous three years; another chunk was stolen during the DDoS attacks. By the end of that month, the CEO had shut down the exchange site and declared bankruptcy.
Cyberattacks on Bitcoin exchanges are becoming more common, especially as the currency increases in value. Phishing attacks to steal user or administrator passwords are the most common attack vector, but cybercriminals are also going after mobile wallets and targeting weaknesses in the blockchain. Malware written for Windows and Mac also looks for and steals bitcoins from infected computers.
Because of the nature of the currency, once a bitcoin is stolen, it's nearly impossible to recover.
What other cryptocurrencies compete with Bitcoin?
Bitcoin is the best-known cryptocurrency, but it is not the only one. Here are other cryptocurrencies that have arisen in the wake of Bitcoin:
Ethereum is a software platform and programming language that runs on its own blockchain and is traded as a digital currency commodity. Ethereum is perhaps the most widely used non-Bitcoin-based cryptocurrency and has already spawned a rival fork called Ethereum Classic.
Litecoin is a peer-to-peer, open-source currency that is fully decentralized. Litecoin is mathematically very similar to Bitcoin, but features faster transaction-confirmation times.
Zcash was developed by privacy-minded information-security experts. Zcash's encrypted payment transactions use a unique cryptographic method to verify validity.
Dash was originally known as Darkcoin and is a more secretive version of bitcoin. It offers greater anonymity.
Ripple is a nearly-instant and low-cost international payment service, but it uses its own cryptocurrency called XRP, which doesn't require mining.
Monero claims to be truly anonymous by hiding the addresses used in each transaction. As such, it has become a cryptocurrency of choice for criminal activity. For a time, many cryptocurrency miners surreptitiously embedded into websites mined Monero.
Iota centers on communications and payments between Internet of Things devices. It is billed as the first open-source distributed ledger.
Is Bitcoin a bubble?
Bitcoin may seem like a great investment opportunity, but its bubble has burst once before and may do so again. Bitcoin proponents see it and other cryptocurrencies as the future of currency and trading, and point to the rise in public interest in Bitcoin and its acceptance by mainstream financial firms as evidence of Bitcoin's inevitability.
However, Bitcoin is still an unknown quantity. Its exchange rates are extremely volatile, and we don't know if a one-day drop will turn into a permanent crash. Based on the history of stocks and other commodities, another Bitcoin crash is likely. It's also likely that afterward, there will be more stability as the market corrects itself.
We're not here to tell you whether to invest in Bitcoin or any cryptocurrency. This piece is a guide to help you better understand Bitcoin, both its benefits and its risks.
Who is Bitcoin creator Satoshi Nakamoto?
The true identity of Bitcoin's creator is a mystery. Some conspiracy theorists think the U.S. National Security Agency has figured out Nakamoto's identity, or that the CIA created Bitcoin.
Nakamoto might have been Hal Finney, a California computer scientist who was the first person to receive a Bitcoin payment from Nakamoto. Finney always denied that he was Nakamoto, and he died in 2014.
Another leading suspect is Nick Szabo, a computer specialist based in Washington state who worked on the theories of cryptocurrencies years before Bitcoin was unveiled. One analysis of Szabo's and Nakamoto's writing styles concluded they were "probably" the same individual, but Szabo has denied it.
In 2014, Newsweek magazine claimed that a Japanese-American computer specialist named Dorian Nakamoto was the Bitcoin creator. Dorian Nakamoto quickly denied it. In 2016, Australian entrepreneur Craig Wright announced that he was Satoshi Nakamoto. Several experts said Wright's cryptographic "proof" was unconvincing.
Despite the Japanese name, Satoshi Nakamoto wrote in fluent, North American-tinged English, and most of his emails and forum postings were time-stamped during working hours in the Western Hemisphere.
If Satoshi Nakamoto is a single individual, he or she is worth a fortune. Bitcoin addresses controlled by Satoshi Nakamoto hold nearly 1 million bitcoins, worth about $10 billion at current exchange rates.