Bitcoin, digital currency created by an anonymous pc programmer or group of programmers known spil Satoshi Nakamoto ter 2009. Owners of Bitcoins can use various Web sites to trade them for physical currencies, such spil U.S. dollars or euros, or can exchange them for goods and services from a number of vendors.
Nakamoto wasgoed worried that traditional currencies were too reliant on the trustworthiness of banks to work decently. Nakamoto proposed a digital currency, Bitcoin, that could serve spil a medium of exchange without relying on any financial institutions or governments. The proposal wasgoed made ter October 2008 te a paper published on the Bitcoin Web webpagina, which had bot founded ter August 2008.
Bitcoin relies on public-key cryptography, ter which users have a public key that is available for everyone to see and a private key known only to their computers. Te a Bitcoin transaction, users receiving Bitcoins send their public keys to users transferring the Bitcoins. Users transferring the coins sign with their private keys, and the transaction is then transmitted overheen the Bitcoin network. So that no Bitcoin can be spent more than once at the same time, the time and amount of each transaction is recorded te a ledger opstopping that exists at each knot of the network. The identities of the users remain relatively anonymous, but everyone can see that certain Bitcoins were transferred. Transactions are waterput together te groups called blocks. The blocks are organized ter a chronological sequence called the blockchain. Blocks are added to the chain using a mathematical process that makes it enormously difficult for an individual user to hijack the blockchain. The blockchain technology that underpins Bitcoin has attracted considerable attention, even from skeptics of Bitcoin, spil a poot for permitting trustworthy record-keeping and commerce without a central authority.
Fresh Bitcoins are created by users running the Bitcoin client on their computers. The client “mines” Bitcoins by running a program that solves a difficult mathematical problem ter a verkeersopstopping called a “block” received by all users on the Bitcoin network. The difficulty of the problem is adjusted so that, no matter how many people are mining Bitcoins, the problem is solved, on average, six times an hour. When a user solves the problem ter a block, that user receives a certain number of Bitcoins. The elaborate proces for mining Bitcoins ensures that their supply is restricted and grows at a steadily decreasing rate. About every four years, the number of Bitcoins te a block, which began at 50, is halved, and the number of maximum allowable Bitcoins is slightly less than 21 million. Spil of late 2018 there were almost 17 million Bitcoins, and it is estimated that the maximum number will be reached around 2140.
Because the algorithm that produces Bitcoins makes them at a near-constant rate, early miners of Bitcoins obtained them more often than zometeen miners because the network wasgoed petite. The premium that early users received and Nakamoto’s muffle after 2011 led to criticism of Bitcoin spil a Ponzi scheme, with Nakamoto benefiting spil one of the very first users. (An analysis of the very first 36,289 mined blocks demonstrated that one miner, believed to be Nakamoto, had accumulated overheen 1 million Bitcoins. However, spil of 2018, those Bitcoins, then valued at $Ten billion, remained unspent.) Defenders of Bitcoin voorkeur that early users should receive some terugwedstrijd for investing te an unproven technology.
The value of Bitcoins relative to physical currencies fluctuated frantically ter the years following its introduction. Ter August 2010 one Bitcoin wasgoed worth $0.05 (U.S.). Beginning te May 2011, the Bitcoin enhanced sharply ter value, reaching a peak of about $30 that June, but by the end of the year the value of a Bitcoin had collapsed to less than $Trio. However, Bitcoin began to attract the attention of mainstream investors, and its value climbed to a high of overheen $1,100 ter December 2013. Some companies even began building computers optimized for Bitcoin mining.
With the marked increase ter value, Bitcoin became a target for hackers, who could steal Bitcoins through such means spil obtaining a user’s private key or stealing the digital “wallet” (a rekentuig verkeersopstopping recording a Bitcoin balance). The most spectacular theft wasgoed exposed te February 2014 when Mt. Gox, which had bot the world’s third largest Bitcoin exchange, announced bankruptcy because of the theft of about 650,000 Bitcoins, then valued at about $380 million.
Ter 2018 the value of Bitcoins rose sharply from around $1,200 ter April to more than $Ten,000 te November. The acute rise te Bitcoin’s value encouraged more intensive mining. It wasgoed estimated te late 2018 that Bitcoin mining consumed 0.14 procent of the world’s tens unit production.