Tue, 20 Aug, 2019

Know About BITCOIN

By Kundan Shumsher Rana

Photo Courtesy : Kundan Shumsher Rana Bitcoin is an online form of currency that uses peer-to-peer technology. It can operate without any central authority to manage the transactions. The issuing of bitcoins are carried out collectively by networks. Bitcoin is open-source and its design is public. No person, country or authority owns Bitcoin. Everyone can take part. People can take advantage of the unique properties of Bitcoin to generate a hefty amount of income. What Are Bitcoins? Bitcoin is a form of currency that doesn’t require any notes, coins or any sort of physical currency. It is a digital currency. In the age of Internet and digitization, people have moved on from phone to VoIP calls, meeting in person to video conferencing, handwritten mails to email, cable television to IPTV, and the list goes on. Who Developed The Idea Of Bitcoins? Bitcoin was introduced by Satoshi Nakamoto. The thing is, this name is an alias. He is said to be from Japan but his mail ID was from Germany. Also, the bitcoin software was not available in Japanese. He developed the system and the Bitcoin software in 2009 and disappeared around 2010. There are plenty of speculation about his real identity. Some even suggest that his name was just a mashup of popular companies, like SAmsung TOSHIba NAKAmichi MOTOrola. Despite all this, what he created was definitely the fantasy of every tech guy in the world. What Is So Special About the Bitcoin System? The Bitcoin is a system which allows anonymous currency transactions. No one will know about the payment or about all other information related to the payment; including who sent it and who received it. Satoshi created it by making the Bitcoin system, a peer-to-peer network. It is not controlled by any central authority but is run by network of contributors and freedom enthusiasts, who donated their time and energy to this innovation. Essentially, people can perform monetary transactions and no authority or organization will come to know about it. With all these facilities, a trouble arises that is called “Double Spending”. Satoshi was able to come up with a solution to it as well. What is Double Spending? Digital data can be copied. Let us say, people copy software and sell it as counterfeit or pirated copies. The same can be done with digital currency. One can copy the digital currency and use it as many time as he/she likes. This problem was solved by showing all transactions in a public list. Whenever a new transaction is made, the validity of that transaction is checked by confirming from the list, ensuring that the digital currency was not used before. This way, no one can copy the currency. It is a simple but effective idea to stop double spending of the same bitcoin. How Does A Public Listing Make Things Anonymous? The public listing shows the transaction ID and the amount transferred. The user will be anonymous in the system, since the user doesn’t need to provide any personal details. Likewise, when payment gateways like Paypal are used, the user needs to give up all these personal details. How do you use Bitcoins then? Bitcoins are stored in digital wallets, which are kept either in the user’s computer or on a website online. The online website will manage and secure your wallet for you. Any user can have as many wallets and bitcoin addresses as they like. What’s more, Bitcoin software can be used on top of Tor to prevent anyone from tracking the IP address – total anonymity guaranteed! How many people are using this? Presently, 10.71 million Bitcoins are in existence. This is equivalent  to 207.929 million USD worth. In a single day, more than 45,000 transactions of a total of BTC 2.5 million (worth of USD 48.5 million) is handled by the bitcoin network. How Do I Acquire Bitcoins? Acquiring and using Bitcoins is simple. There are various ways to get Bitcoins:

  • “Mining”
  • Currency exchange (bitcoin in return for Dollars or Euros) via bitcoin provider services like Mt.Gox
  • Providing services to others in return of Bitcoins
What is Mining? Mining is a process of extracting Bitcoins currency. Bitcoin mining is a business where most people mint Bitcoins to gain profit. Bitcoins are minted using a special software, known as Bitcoin Miner. It tries to find a new block in a chain of Bitcoin network. When a new block is found, the owner is granted with 50 Bitcoins in his/her account. To find a new block, a computer has to perform long and tough hash calculations. How Do You Spend A Bitcoin? Spending Bitcoins is not difficult. It is the same as spending any other form of currency. The user can either send Bitcoins to other users, buy goods or donate to nonprofit foundations that accept it. Archive.org, Wikileaks, Free Software Foundation, P2P Foundation, Operation Anonymous are some nonprofit foundation that accept Bitcoin. You can send Bitcoins to anyone once you know their bitcoin address. Bitcoin Deals is another example where people can buy any merchandise online. The Bitcoin system is quickly gaining popularity. BTC 1 was worth USD 6 a year ago. Now it is worth USD 326.12. BTC 1 is worth NRs 34,529.59 The Bitcoin system is praised by Security experts and digital freedom enthusiasts for being a one-of-the-kind system that opens doors to new possibilities. Due to its guaranteed anonymity feature, it’s users can feel safe when concerned with privacy. As no authority can trace the transactions, this also lead to misuse of the system for example, in illegal work. But just because it can be used for illegal purposes, doesn’t mean we should do it.