Thursday, January 28, 2021
Germany Latest News
  • Sports
  • USA
  • Asia
  • Health
  • Life Style
  • Tech
  • Science
  • Latin America
  • Africa
  • Europe
No Result
View All Result
Germany Latest News
Home Tech

Bitcoin: Seven questions you were too embarrassed to ask

admin by admin
December 2, 2017
in Tech
0
Bitcoin: Seven questions you were too embarrassed to ask
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

Related posts

WhatsApp extends ‘confusing’ update deadline

WhatsApp extends ‘confusing’ update deadline

January 16, 2021
Facebook, Twitter and YouTube take action on Trump’s posts amid riots at the US Capitol

Facebook, Twitter and YouTube take action on Trump’s posts amid riots at the US Capitol

January 6, 2021
No, these aren't actually bitcoins.fdecomite

Bitcoin's price hit a new record this week, soaring above $11,000 on Wednesday morning. The price has been a roller coaster since then, with the price briefly dropping to $9,000 later on Wednesday before regaining much of its lost value in recent days.

The currency's astonishing gains—it was worth less than $1 in early 2011—has caused a lot of people to wonder if they should be paying attention to the technology. Coinbase, a popular service for trading dollars and bitcoins, now says it has more than 13 million users. While almost everyone has heard of Bitcoin at this point, many people are fuzzy on the details: what is a bitcoin, exactly? How do I buy some? What would I use it for?

We're here to help. Read on for a beginner's guide to bitcoin. We'll explain what Bitcoin is, how it works, and what ordinary people should know about the technology.

1) What's a Bitcoin?

EnlargeChris Ratcliffe/Bloomberg via Getty Images

The term Bitcoin actually refers to two different things. Capital-B Bitcoin is a payment network—like MasterCard is a payment network. Lower-case bitcoin refers to the currency of the Bitcoin network—much like MasterCard uses dollars in the United States.

What makes Bitcoin different from MasterCard, PayPal, and other payment networks that existed in 2008 (when Bitcoin was invented) is that Bitcoin was the world's first payment network that's completely decentralized. The MasterCard network is operated by MasterCard Inc., but there's no Bitcoin Inc. in charge of the Bitcoin network. Rather, it's a peer-to-peer network that maintains a shared transaction ledger called the blockchain.

Inventing a new currency was an unavoidable consequence of making the Bitcoin network fully decentralized. On a conventional payment network, the network owner promises to redeem balances for conventional currencies like dollars or euros. But there's no Bitcoin company, so there's no one to guarantee that Bitcoin balances will have any particular value. Instead, bitcoins float against conventional currencies, with their value determined by supply and demand.

And no, those physical "bitcoins" you see in a lot of pictures aren't what a bitcoin "really" looks like. Bitcoins are just entries in the Bitcoin blockchain. If you own some bitcoins, that means you have some cryptographic private keys stored on your computer, on an external drive, or printed out on a piece of paper somewhere. These keys allow people to spend bitcoin balances in much the same way that the password to your bank's website allows you to spend the balance in your bank account. But you can't withdraw bitcoins from the network the way you withdraw physical currency from your bank.

2) If Bitcoins aren't tied to a conventional currency, how did they get so valuable?

Notice that this chart has a logarithmic Y axis.
Enlarge/ Notice that this chart has a logarithmic Y axis.Bitcoincharts

Good question! When the Bitcoin network was first created in 2009, bitcoins were barely worth anything. Bitcoin lore holds that the very first real-world Bitcoin transaction occurred in May 2010, when one early Bitcoin user paid another user 10,000 bitcoins for two pizzas. At the time, Bitcoins were trading for less than a penny each.

But as the Bitcoin community grew, the currency's value steadily climbed. By the time I started paying attention to Bitcoin in April 2011, its value had climbed to $1. This was at the start of the first great Bitcoin bubble. Media coverage of Bitcoin attracted new users, which caused the price to rise. The rising price, in turn, attracted more media interest. The value rose to more than $30 by June, before it crashed and fell to $2 before the end of 2011.

This cycle repeated two more times in 2013. In May 2013, Bitcoin's price briefly rose above $250, before falling by about 80 percent. Then in late 2013, Bitcoin's price rose above $1,000 before once again crashing by 80 percent. The current boom—which has taken the currency from a low of $200 in early 2015 to a high above $10,000 in recent days—is the fourth major Bitcoin boom.

Each of these booms—and, for that matter, most bubbles throughout history—has been driven by the same basic publicity-price feedback loop. As an Internet writer, I've seen this process first hand. During times when the price is rising, there's a lot of traffic to be had writing about Bitcoin, so reporters like me write articles (like this one!) about it. The articles cause more people to pay attention to the currency, and some of those people decide to buy. That pushes the price up even more, triggering more media coverage and more public interest.

This bootstrapping process has achieved something that most people—including me—would have thought was impossible a decade ago: a valuable currency that's neither backed by a commodity like gold or silver, nor by a powerful institution like a government or bank. On one level, Bitcoin's value is rising simply because more and more people are betting that its value will continue to go up over time. The question, of course, is whether they're right about that.

Original Article

Ars Technica

Previous Post

Hawaii tests sirens amid North Korea threat

Next Post

Something we can all agree on? Less Affleck Batman, more Batman Ninja

Next Post
Something we can all agree on? Less Affleck Batman, more Batman Ninja

Something we can all agree on? Less Affleck Batman, more Batman Ninja

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED NEWS

This is what it’s like to be a young chef in London

This is what it’s like to be a young chef in London

3 years ago
Sisters found bound together ‘jumped into river’

Sisters found bound together ‘jumped into river’

2 years ago
Boris Johnson leaves intensive care

Boris Johnson leaves intensive care

10 months ago
Dealer Linked To Elephant Tranquilizer Overdose Death Faces Murder Charge

Dealer Linked To Elephant Tranquilizer Overdose Death Faces Murder Charge

3 years ago

FOLLOW US

  • 79 Followers

BROWSE BY CATEGORIES

  • Africa
  • Asia
  • Europe
  • Health
  • latest news
  • Latin America
  • Life Style
  • Science
  • Sports
  • Tech
  • USA

BROWSE BY TOPICS

2018 League Balinese Culture Bali United Budget Travel Champions League Chopper Bike Doctor Terawan Istana Negara Market Stories National Exam Pope Francis may mediate Gulf Crisis Solution Visit Bali
No Result
View All Result

Recent Posts

  • Kunal Kapur: I want to research more on immunity boosters in 2021
  • Coronavirus: Face mask, face shield, FFP2, N95, KN95 – what’s the difference?
  • Bundesliga: Borussia Dortmund’s home woes continue after Marco Reus penalty miss
  • As Germans continue to circulate, COVID death rate rises
  • Trump’s final full week in office ends with the nation in disarray

Categories

  • Africa
  • Asia
  • Europe
  • Health
  • latest news
  • Latin America
  • Life Style
  • Science
  • Sports
  • Tech
  • USA

Tags

2018 League Balinese Culture Bali United Budget Travel Champions League Chopper Bike Doctor Terawan Istana Negara Market Stories National Exam Pope Francis may mediate Gulf Crisis Solution Visit Bali
German Constitutional Court upholds ban on anti-lockdown protest
latest news

German Constitutional Court upholds ban on anti-lockdown protest

by admin
December 6, 2020
0

An anti-lockdown group had filed an urgent court appeal hoping to allow 20,000 people to gather in Bremen. Despite the...

Read more

Recent News

  • Kunal Kapur: I want to research more on immunity boosters in 2021
  • Coronavirus: Face mask, face shield, FFP2, N95, KN95 – what’s the difference?
  • Bundesliga: Borussia Dortmund’s home woes continue after Marco Reus penalty miss

Category

  • Africa
  • Asia
  • Europe
  • Health
  • latest news
  • Latin America
  • Life Style
  • Science
  • Sports
  • Tech
  • USA

Recent News

Kunal Kapur: I want to research more on immunity boosters in 2021

Kunal Kapur: I want to research more on immunity boosters in 2021

January 16, 2021
Coronavirus: Face mask, face shield, FFP2, N95, KN95 – what’s the difference?

Coronavirus: Face mask, face shield, FFP2, N95, KN95 – what’s the difference?

January 16, 2021
  • About
  • Advertise
  • Careers
  • Contact

© 2021 JNews - Premium WordPress news & magazine theme by Jegtheme.

No Result
View All Result
  • Home
  • Sports

© 2021 JNews - Premium WordPress news & magazine theme by Jegtheme.