Bitcoin is a cryptocurrency, payment system and merchandise. The term also applies to the protocol and to the P2P network that supports it, and is commonly referred to as a digital currency.
Conceived in 2009, the identity of its creator or creators is unknown, appearing under the pseudonym of Satoshi Nakamoto. It is based on blockchain technology, similar to a large accounting book, public and distributed, which reflects the history of all transactions, in what is known as block chain, hard to falsify.
Generally Bitcoin is used to refer to the network or protocol and bitcoin (also recommended in Spanish bitcoin, plural bitcoin) to refer to monetary units. Bitcoin is characterized by decentralization, is not backed by any government or central bank and "lacks legal security." It uses a work test system to prevent double spending (that the same bitcoin is used several times) and reach consensus among all the nodes that make up the network exchanging information about an unreliable and potentially compromised network.
The transactions do not need intermediaries and the protocol is open source. Bitcoin, and in general cryptocurrencies, are an innovative project in constant evolution and change. There is a certain consensus on the potential of cryptocurrency or digital money, auguring a future in which these will become a system of universal exchange. Its technology, blockchain, can solve the security problems posed by decentralized exchanges among equals, and can be applied in many different fields. However, the current cryptocurrencies, the bitcoin between them, raise unknowns that make them suspicious of fraud.
Several companies and small businesses accept bitcoins as a means of payment for services of all kinds, such as telephony, web hosting, gift cards, legal advice, tourism, and others. Its international scope and the fact that users can trade with a certain anonymity, has made it possible to break through in increasingly regulated sectors, such as online bets and poker games.
Multinationals such as Microsoft, Dell, Time Inc. and Dish Network allow payment with bitcoins, as well as Virgin Galactic among others. Paypal announced in September 2014 that it has begun preparing its system to accept them.38 Differences Currently, almost all national currencies, such as the euro or the dollar, are fiat money. That is, central banks issue currency by creating debt that is multiplied through commercial banks and the fractional reserve system.
Bitcoin, also with a fiduciary nature, uses a work test system to simulate the mining of raw materials. Without an intrinsic value both bitcoin and paper money, in favor of the latter plays the support of governments and central banks, while bitcoin lacks that support and its operation (you can only exit and recover the funds if other users are willing to buy them) would resemble a Ponzi scheme or pyramid scheme in which the investment is recovered when new funds are added to the system.
The criticism of Bitcoin is based on two aspects. On the one hand, the repercussions that it can have on the users of the coin; on the other, the repercussions on society as a whole, for its potential to transform the relationships between citizens. The current users of bitcoin could suffer patrimonial losses in the case of a decrease in their use due to the impairment of confidence in the protocol or the currency, due to the volatility of the exchange rate, the irreversible loss of funds due to thefts in the exchange houses, software errors, computer viruses, denial of service attacks, etc.
Advocates of bitcoin argue that no organization or individual can control bitcoin and the network remains secure even if all its users can not be trusted. In any case, the security firms warn against the possibility of theft of the code to any user or computer attacks against the exchange offices.
Hackers design programs for that theft. Kaspersky analysts disclosed the identification of the CryptoShuffler Trojan, for example, designed to change the addresses of cryptocurrency portfolios of users in the clipboard of the infected device. Since the operations performed can not be canceled and is anonymous, any data theft has no solution. On the other hand, society could be transformed significantly if the use of bitcoin could be more or less widespread. Central banks would have limited influence over payment systems, regulation, financial stability, monetary policy and price stability.
by fariassteemit
