Digital Currency: What is Bitcoin?

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Introduction:

Throughout this

Bitcoin: A History; what is bitcoin?

To start off primarily, Bitcoin is a digital currency as opposed to physical currency that we’re accustomed to and use in our daily life. Straight off their site, Bitcoin is described as a pseudo-anonymous, P2P technology operating with no central authority or banks, it’s open-source, public, owned by no one and open for everybody to take part; but what does that all mean? “Bitcoin is the leader in a new generation of emerging currencies known as “cryptocurrencies” which aim to, among other things, facilitate the movement of money electronically while still maintaining a sense of privacy,” (Hobson)

Bitcoin stores no personal data (a characteristic we will later see as a double-edged sword) and therefore nothing personally identifiable is recorded. Instead, if you were to have a Bitcoin, you’d have many wallet addresses, which essentially are hashes of public keys. Bitcoin has no way of identifying how much you own or spend however there exists a “blockchain” where all transactions are recorded. These transactions can be seen by everyone however nothing points back to specific users sits transactions are recorded using random numbers of which anyone can have several. The transactions are very much like Swiss banking; you only have a number, you have no clue who is behind the number and payments are made directly to that number only.

To generate bitcoins, they must be produced through a process called “mining” which is done on mining software. Mining is at-large a trial and error process which would essentially enable you to mine more once you’re accustomed to it however instead, it gets more difficult with time. The way Bitcoin was set up ensures that ...

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...from Peso to dollar and withdraw from the bank because they saw that their money was going to be worthless in a short amount of time. That crisis ended with the resignation of the President, a succession crisis, six presidents in a row, and the largest sovereign debt default in history.

Bitcoin as a solution

Now imagine a solution whereby the latter Argentinian could protect the value of the hard earned cash that he earned. A mother could receive two additional dollars from her son in London. A merchant could collect payment via any mobile phone in the world; Bitcoin does all of that.

Works Cited

Hobson, Dominic. "What Is Bitcoin?" XRDS: Crossroads, The ACM Magazine for Students 20.1 (2013): 40. Print.

"Towards the End of Poverty." The Economist. The Economist Newspaper, 01 June 2013. Web. 07 May 2014.

http://remittanceprices.worldbank.org/en

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