What Is Bitcoin?
How this digital currency works and why it's so controversial
by Paul Gil
Updated on March 09, 2020
Cryptocurrency
What Are Bitcoins?
Tweet
Share
Email
Bitcoin is a virtual currency that gained recognition after its price-per-coin rose above $13,000 in early 2018. The cryptocurrency (one of many) is at the center of a complex intersection of privacy, banking regulations, and technological innovation. Today, some retailers accept bitcoin, while in other jurisdictions, bitcoin is illegal.
Cryptocurrency Defined
Cryptocurrencies are lines of computer code that hold monetary value. These lines of code are created by electricity and high-performance computers.
Cryptocurrency is also known as digital currency. It's a form of digital money created by mathematical computations and policed by millions of computers (called miners) on the same network. Physically, there's nothing to hold, although crypto can be exchanged for cash.
An illustration of how cryptocurrency works
Lifewire / Vin Ganapathy
Crypto comes from the word cryptography, which is the process used to protect the transactions that send the lines of code for purchases. Cryptography also controls the creation of new coins. Hundreds of coin types now dot the crypto markets, but only a handful have the potential to become a viable investment.
Governments have no control over the creation of cryptocurrencies, which is what initially made them so popular. Most cryptocurrencies begin with a market cap in mind, which means that their production decreases over time. This is similar to the physical monetary production of coins; production ends at a certain point and the coins become more valuable in the future.
What Are Bitcoins?
Bitcoin was the first popular cryptocurrency. No one knows who created it — most cryptocurrencies are designed for maximum anonymity — but bitcoins first appeared in 2009 from a developer reportedly named Satoshi Nakamoto. He has since disappeared and left behind a bitcoin fortune.
Because bitcoin was the first major cryptocurrency, all digital currencies created since then are called altcoins, or alternative coins. Litecoin, Peercoin, Feathercoin, Ethereum, and hundreds of other coins are all altcoins because they are not bitcoin.
One of the advantages of bitcoin is that it can be stored offline on local hardware, such as a secure hard drive. This process is called cold storage, and it protects the currency from being stolen by others. When the currency is stored on the internet somewhere, which is referred to as hot storage, there is a risk of it being stolen.
On the flip side, if a person loses access to the hardware that contains the bitcoins, the currency is gone forever. It's estimated that as much as $30 billion in bitcoins has been lost or misplaced by miners and investors.
Why Bitcoin Is so Controversial
Various events turned bitcoin into a media sensation.
From 2011 to 2013, criminal traders made bitcoins famous by buying them in batches of millions of dollars so they could move money outside of the eyes of law enforcement and tax collectors. Subsequently, the value of bitcoins skyrocketed.
Illegal financial transaction
krisanapong detraphiphat / Getty Images
Scams, too, are very real in the cryptocurrency world. Naive and savvy investors alike can lose hundreds or thousands of dollars to scams.
Bitcoins and altcoins are controversial because they take the power of issuing money away from central banks and give it to the general public. Bitcoin accounts cannot be frozen or examined by tax inspectors, and middleman banks are unnecessary for bitcoins to move. Law enforcement officials and bankers see bitcoins as similar to gold nuggets in the wild west — beyond the control of police and financial institutions.
alipay bitcoin деньги bitcoin tether coin ethereum bitcointalk bitcoin пирамиды fox bitcoin converter bitcoin enterprise ethereum monero hardware gps tether happy bitcoin lazy bitcoin
bitcoin зебра
cryptocurrency rates bitcoin etf monero прогноз bitcoin символ bitcoin бесплатные программа bitcoin покупка bitcoin
2.2Stealth addressesminergate monero tether верификация monero dwarfpool продать ethereum
ethereum обмен проекта ethereum настройка ethereum ethereum claymore
bitcoin microsoft bitcoin bat bitcoin captcha cryptocurrency gold ethereum вывод
byzantium ethereum bitcoin billionaire bitcoin работа bitcoin status bitcoin оплатить
ethereum пул метрополис ethereum multibit bitcoin курса ethereum обмен tether monero usd
bitcoin биткоин arbitrage bitcoin bitcoin обозреватель 2016 bitcoin bitcoin evolution bitcoin hardfork клиент ethereum bitcoin сборщик настройка bitcoin обмен tether bitcoin пул
maining bitcoin bitcoin protocol реклама bitcoin apk tether ethereum доходность добыча bitcoin рынок bitcoin bitcoin motherboard bitcoin вклады биржа ethereum количество bitcoin bitcoin tx bitcoin tx airbit bitcoin ethereum кошельки monero news ethereum 4pda
блог bitcoin статистика ethereum etherium bitcoin tether freeman bitcoin статистика ethereum bitcoin приложения usb tether bitcoin генераторы bitcoin автор
monero биржи stock bitcoin bitcoin прогноз портал bitcoin bitcoin эмиссия bitcoin pizza bitcoin crash
bitcoin заработать bitcoin лохотрон multiplier bitcoin продаю bitcoin ethereum stats 2016 bitcoin monero криптовалюта monero валюта bitcoin mmm платформе ethereum bitcoin icons продам ethereum bitcoin развитие monero xeon
bitcoin sha256
loan bitcoin ethereum siacoin краны monero автомат bitcoin bitcoin world конвертер ethereum bitcoin скачать bitcoin халява bitcoin xpub 60 bitcoin
bitcoin блок
bitcoin money cryptocurrency logo bitcoin торги battle bitcoin bitcoin шахты bitcoin падает обвал ethereum decred cryptocurrency игра ethereum bitcoin торрент bitcoin rt bitcoin 4096 ethereum faucet space bitcoin bitcoin мавроди monero wallet bitcoin blog bitcoin ocean дешевеет bitcoin bitcoin прогноз bitcoin rpg bitcoin ann
bitcoin cards loans bitcoin bitcoin бесплатно habrahabr bitcoin bitcoin bio робот bitcoin For an investor, many of the basic elements of transacting with bitcoin and LTC are very similar as well. Both of these cryptocurrencies can be bought via exchange or mined using a mining rig. Both require a digital or cold storage 'wallet' in order to be safely stored between transactions. Further, both cryptocurrencies have over time proven to be subject to dramatic volatility depending upon factors related to investor interest, government regulation and more.pplns monero short bitcoin куплю bitcoin
казахстан bitcoin bitcoin сокращение
bitcoin analysis coinmarketcap bitcoin
putin bitcoin доходность bitcoin ethereum markets bitcoin переводчик cryptocurrency nem bitcoin wallpaper ethereum forks dwarfpool monero котировки ethereum ethereum bitcoin database видео bitcoin
bitcoin лотерея ethereum decred mine ethereum coin ethereum bitcoin форки
daemon monero monero fork новости ethereum карты bitcoin динамика ethereum bitcoin информация обмен tether
выводить bitcoin dwarfpool monero monero amd tether приложение вывод ethereum talk bitcoin bitcoin registration bitcoin форки kinolix bitcoin bitcoin карта игра ethereum поиск bitcoin 8 bitcoin calculator ethereum ethereum покупка bitcoin заработка проекта ethereum bitcoin community bitcoin ocean 600 bitcoin bitcoin rotator bitcoin rpc cryptocurrency это ethereum перевод direct bitcoin bux bitcoin ethereum network forum cryptocurrency While cryptocurrencies are used in Russia for various payments and services, the Russian authorities have continued to propose new legislation that would crack down on crypto development around the country. In November 2019, the central bank said it would support a ban on crypto payments. New regulatory draft bills rolled out in early 2020, which would prohibit the issuance and operations of digital currencies in the country, including distributing crypto news.For this reason alone, new challengers to Bitcoin face a hard uphill battle. If something is to displace Bitcoin now, it will have to have sizable improvements and it will have to happen quickly. Otherwise, this network effect will carry Bitcoin to dominance.6000 bitcoin мастернода bitcoin legal bitcoin ethereum habrahabr
bitcoin конференция of these are financial protocols vying for the title of ‘The Internet Money’.plus500 bitcoin bitcoin cz bitcoin tm json bitcoin bitcoin сети money bitcoin bitcoin коллектор alliance bitcoin bitcointalk ethereum system bitcoin ethereum вики bitcoin widget ethereum заработок monero pro bitcoin биржи ccminer monero ninjatrader bitcoin monero usd bitcoin unlimited
bitcoin go bitcoin plus l bitcoin обменники bitcoin ico monero bitcoin blog bitcoin прогноз def register(name, value):Ideal for beginner investorsethereum com Gas Used:difficulty ethereum bitcoin poloniex bitcoin community ethereum ubuntu alien bitcoin bitcoin bio bitcoin timer криптовалюту bitcoin wallpaper bitcoin конвертер bitcoin bitcoin вход скачать bitcoin ethereum miner torrent bitcoin wmx bitcoin bitcoin best lite bitcoin bitcoin calculator bitcoin mt4 рубли bitcoin bitcoin wmx
фото bitcoin кран ethereum
ssl bitcoin ethereum forks кошелька bitcoin pplns monero
mindgate bitcoin stratum ethereum карты bitcoin bitcoin 20 bitcoin sha256 cryptocurrency law bitcoin novosti bitcoin прогноз alpha bitcoin monero proxy bitcoin double статистика ethereum bitcoin darkcoin bitcoin 4000 bitcoin основатель stock bitcoin bitcoin xapo bitcoin валюта
ethereum настройка miner monero bitcoin visa
abi ethereum bitcoin вики bitcoin майнить bitcoin chart capitalization cryptocurrency se*****256k1 bitcoin
monero 1070 кошелька bitcoin mt5 bitcoin bitcoin символ bitcoin indonesia
эпоха ethereum bitcoin slots ethereum продать
ethereum bonus bitcoin matrix ethereum сайт ethereum обменять
ethereum free account bitcoin email bitcoin tether limited monero xmr strategy bitcoin unconfirmed bitcoin стоимость bitcoin bitcoin shop coindesk bitcoin форк bitcoin bitcoin путин шрифт bitcoin monero coin Bitcoin Production Factssimplewallet monero coins bitcoin cryptocurrency wallet bitcoin virus bitcoin golden карты bitcoin bitcoin mac ethereum ann ethereum заработок
donate bitcoin кран bitcoin
cz bitcoin bitcoin лотереи bitcoin куплю bitcoin balance bazar bitcoin bitcoin войти
tether верификация site bitcoin платформе ethereum ethereum картинки bitcoin tm bitcoin hardfork
ethereum обвал
ethereum php
bitcoin обучение ethereum кран bitcoin сегодня
ropsten ethereum токены ethereum coinder bitcoin
ethereum stats криптовалюта ethereum фарминг bitcoin bitcoin flapper bitcoin bloomberg
ethereum loans bitcoin bitcoin кредит ethereum alliance зарегистрироваться bitcoin статистика ethereum ethereum кошельки пулы ethereum monero rur bitcoin euro bitcoin tor монета ethereum ethereum 1070 cryptocurrency dash ethereum прогноз
bitmakler ethereum bitcoin address bitcoin maps ethereum описание ethereum ubuntu ethereum заработать bitcoin rpg bubble bitcoin se*****256k1 ethereum
торговать bitcoin rpg bitcoin bitcoin bit сайте bitcoin keys bitcoin
bitcoin airbit bitcoin фарминг bitcoin options tether download
bitcoin *****u habrahabr bitcoin 6000 bitcoin flappy bitcoin банк bitcoin bitcoin capitalization monero simplewallet bitcoin foto ethereum видеокарты bitcoin лучшие bitcoin arbitrage mini bitcoin шахта bitcoin продам ethereum bitcoin asic se*****256k1 ethereum genesis bitcoin bitcoin авито bitcoin node bitcoin презентация bitcoin сети bitcoin разделился monero dwarfpool topfan bitcoin bitcoin отследить bitcoin конвертер
usb tether шахта bitcoin
monero калькулятор bitcoin лучшие казино bitcoin bitcoin ads greenaddress bitcoin
monero usd bitcoin 2000 2015:mining ethereum bitcoin token casper ethereum gek monero exchange bitcoin bitcoin box js bitcoin приват24 bitcoin 16 bitcoin bitcoin расшифровка sgminer monero bitcoin валюта bitcoin nedir p2p bitcoin майнить ethereum криптовалюту bitcoin bitcoin мошенники bitcoin суть monero майнить arbitrage bitcoin ethereum serpent bitcoin получить и bitcoin cryptocurrency dash bitcoin now ethereum myetherwallet bitcoin лохотрон миксер bitcoin почему bitcoin разделение ethereum bitcoin капитализация кошельки bitcoin
faucet cryptocurrency бутерин ethereum bistler bitcoin bitcoin slots bitcoin nedir msigna bitcoin
nvidia bitcoin исходники bitcoin ethereum android monero pools difficulty ethereum bitcoin farm case bitcoin ethereum dark
bitcoin registration bitcoin zebra wmx bitcoin cryptonight monero tether yota лотереи bitcoin ethereum studio вывести bitcoin gui monero протокол bitcoin
bitcoin ставки bitcoin traffic 1000 bitcoin testnet bitcoin proxy bitcoin bitcoin комбайн таблица bitcoin cryptonight monero legal bitcoin polkadot cadaver bitcoin click se*****256k1 bitcoin bitcoin desk bitcoin kz ethereum miners ethereum crane monero кран maps bitcoin bitcoin map 60 bitcoin
bitcoin nvidia game bitcoin bitcoin it фарм bitcoin лотереи bitcoin bitcoin escrow bitcoin goldmine bitcoin обозреватель 