Digital Currency And An Online Payment System Essay

Digital Currency And An Online Payment System Essay

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Bit-coins are both a world wide decentralized virtual currency and an online payment system created by some anonymous person with the pseudonym: Satoshi Nakamoto. It was introduced on January 3, 2009 and it peer to peer; users can transact without a middle man. After Nakamoto left the project, he gave ownership to a group of people to spread responsibility and to prevent one person gaining control over the entire bit-coin project. Bit-coins are created by a process called mining. Mining is a procedure where a computer will process work by giving up some computing power in order to verify and record payments into the public ledger or the block-chain. The anonymous use of bit-coins allows criminals to transfer payments secretly across the internet. This attracted many financial regulators, law enforcement agencies and the media.
The prices of bit-coins are set on the open market. Each unit of bit-coin is just an entry on a digital ledger. There is no central authority in Bit-coin, therefore people have to keep track of the bit-coins themselves. Anyone can open a bit-coin account and trade and sell. The current value of a single bit-coin right now is about four hundred and thirty three U.S. dollars. By combining the power of multiple computers to partake in solving mathematical computations, people can receive small amounts of bit-coins until they receive a single bit-coin. There are special machinery that allows the user to effectively increase the amount of bit-coins they make in a given time. For example, a CoinTerra TerraMiner IV, which costs about six thousand dollars, has a five hundred GH/s hash rate, a transformation of a string of characters into a shorter fixed length value or key, creates approximately 1.1 bit-coins a day...


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..., Expedia, Cheapair, BTCTrip and Dell give full access to buy anything using bit-coins. There are many benefits for merchants to accept bit-coin as payment. There is a 1-3 percent savings over credit cards or on PayPal. There are no charge-backs, and an increased privacy for your customers. The payment processor can convert 100% of the sale to the currency of your choice so there is no need to hold bit-coins.
One bit-coins is quite a large amount of money, so people of use smaller units of bit-coins to transfer payment. One millibitcoin (mBTC) is 1000 per bit-coin, a microbitcoin or a bit (μBTC) is 1 million per coin, and a satoshi is a hundred million per bit-coin and the smallest unit in bit-coin. For example if the rate is five hundred dollars per bit-coin, then ten dollars would .02 BTC or 20 mBTC or 20 thousand bits. The current market cap is $10,467,596,650.78.

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