Bitcoin: A look at the digital currency
The coins are created by lending computing power to verify other users' transactions by users who 'mine' them.
Right now, it’s more precious than an ounce of gold, Bitcoin is completely digital and it's the currency of choice for the cyber attackers who crippled computer networks around the world in recent days.
When the “ransomware'' attacks came into action, the hostage was held by encrypting the victim’s data and demanding to send payments in bitcoins in order to again access their data. Bitcoin has an indefinite history, but it's a type of currency that allows people buying goods and services and exchanging money without any involvement of banks, credit card issuers or other third parties.
Here's a briefing at bitcoin.
How bitcoins work?
Bitcoin is a type of digital currency that is not tied to any bank or government and allows users to spend money anonymously. The coins are created by lending computing power to verify other users' transactions by users who 'mine' them.
The profit on sale of Bitcoin is a taxable capital gains for investor.
They receive bitcoins on exchanging money. The coins can also be purchased and sold on exchanges with American dollars and other currencies.
How much is it worth?
According to Coinbase, a company that helps users exchange bitcoins, recently one bitcoin was traded for $2568.95, makes it more valuable than $1,230 that’s what an ounce of gold is valued.
Though, the value of bitcoins can swing sharply. A year ago, one was worth $457.04, which means that it's approximately four times in the last 12 months. But its price doesn't always doesn’t increase.
This past January, a bitcoin's value got hiked by 23 percent against the dollar in just a week. However, it fell by the same amount again in 10 days during March.
Why are bitcoins popular?
Bitcoins are basically a term of computer code that are digitally signed each time they migrate from one owner to the other. Anonymous transactions can be made, that makes the currency popular among libertarians as well as tech enthusiasts, speculators and criminals.
Is it really anonymous?
Yes, much true. Accounts and transactions can be tracked, but the owners of the account aren't necessarily known. However, it might be possible to track down the owners by investigators when bitcoins are changed into normal currency.
For now, the three accounts tied to the ransomware attack appear untouched and it'll be difficult for culprits to cash in anytime soon without being traced.
How much money?
The amount of ransom collected so far appears small relative to the extent of the outbreak Security, experts say. “It appears less than $70,000 has been paid in ransoms,” says Tom Bossert, President Donald Trump's adviser for homeland security and counter terrorism.
Though, It's possible, that there are unknown accounts beyond the three identified.
Who's using bitcoin?
Some businesses have jumped on the bitcoin bandwagon amid a flurry of media coverage. For example overstock.com accepts payments in bitcoin. According to bitcoin wallet site blockchain.info, the currency has become popular enough as recently more than 300,000 per day transactions have been occurring. A year ago, activity was around 230,000 transactions in a day.
Its popularity is still low as compared to cash and payment cards, and many individuals and businesses won't accept bitcoins for payments.
How bitcoins are kept secure?
The bitcoin network works by harnessing individuals' greed for the collective good. Miners, which is a network of tech-savvy users keep the system honest by pouring their power of computing into a blockchain, a tally of every bitcoin transaction that is running globally.
The blockchain prevents crooks from spending one bitcoin twice, and the miners get rewarded for their performance by being gifted with the occasional bitcoin. As long as miners keep the blockchain secure, imitating fraudulently shouldn't be an issue.
How bitcoin came to be?
It's like a mystery. Bitcoin was launched by a person or group of people operating under the name Satoshi Nakamoto, in 2009. Bitcoin was then adopted by a small group of enthusiasts. Nakamoto dropped off the map as bitcoin began to spread over the world and getting attention. But supporters say that doesn't matter, the currency obeys its own internal logic.
Last year, an entrepreneur from Australia, came forward and claimed to be the founder of bitcoin, but some days later, he did not 'have the courage' to publish proof that he is.