Bitcoin is a computerised currency. It is similar to the “intergalactic credits” seen in so many works of science fiction.
It is a direct, peer-to-peer currency with no bank, novault, no mint, and no printing press. In this regard, bitcoin is like email. There are rules, but there is no central control authority.
Bitcoin was born on 31 October 2008 as the brainchild ofSatoshi Nakamoto. All bitcoin transactions are recorded in an open sourcepublic ledger called the blockchain.
Today, bitcoins are exchanged for goods, services, or evenother currency. The fact that bitcoin is not subject to government regulationsmakes it attractive to criminals operating on what is called the darknet.
The total number of available bitcoins is “locked-in” at 21 million, which means that—while there may be inflation due to theincreasing popularity of bitcoin—there can never be an increasing supply. Thereis no central government that can decide to simply “print more money.”
Bitcoin accounts are called wallets. Wallets operate onkeys or strings of information needed to unlock the wallet and spend thebitcoins.
There is also no agency or authority that can freeze or confiscate accounts or wallets, as is the case with bank accounts. This also meansthat there is no authority to complain to if you are cheated out of your bitcoinsand no one to help you if you lose your keys.
Keeping up with the science fiction—the future is now—theme, it is now possible to have a tiny Near-Field Communication (NFC) chip injected into your hand. The chip can be programmed with bitcoin keys sothat it only has to be waved over a point of sale device to complete thetransaction.
Regardless of which system you use, it is necessary tosafeguard your bitcoin keys. Some bitcoin wallets are actually run by companiesthat also hold your keys. Other wallets require you to hold and protect theinformation to use your own keys. Some wallet owners refuse to store thisinformation on any network and simply write it down.
Bitcoins—do they really exist?
