48 SMART: Bitcoins
+Smartan Dad

Thursday, 31 October 2013


Bitcoin is a virtual currency of the Internet invented in 2008 by an anonymous computer scientist known only by the pseudonym Satoshi Nakamoto. It's the first decentralized electronic currency not controlled by a single organization or government but their release is tightly controlled, mimicking a central banking system's control over the minting of money.

Bitcoin is the first digital currency that is completely distributed. The network is made up of users like yourself so no bank or payment processor is required between you and whoever you're trading with. This decentralization is the basis for Bitcoin's security and freedom. Bitcoin is an agreement amongst a community of people to use 21 million secure mathematical tokens (bitcoins) as money.

The benefits of bitcoins are as follow:

  1. There will never be more bitcoins
  2. They are impossible to counterfeit
  3. They can be divided into as small of pieces as you want
  4. They can be transferred instantly across great distances via a digital connection such as the Internet.

This is accomplished by the use of powerful cryptography many times stronger than that used by banks. Instead of simply being "sent" coins have to be cryptographically signed over from one entity to another, essentially putting a lock and key on each token so that bitcoins can be securely backed up in multiple places, and so that copying doesn't increase the amount you own.

The value of a bitcoin soared from USD 13 in January 2013 to a high of USD 266 in April 2013 as more businesses and consumers used them to buy and sell online. Recently, three entrepreneurs have opened the world's first bitcoin ATM in Vancouver, Canada. Instead of cash transactions, the ATM swaps Canadian dollars for bitcoins.

Bitcoins can be bought with near anonymity, which supporters say lowers fraud risk and increases privacy. Critics say that also makes bitcoins a magnet for drug transactions, money-laundering and other illegal activities. However, the virtual currency is gaining hold among businesses and consumers, a key step to a bigger role.


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