Tag: #Block

B-Money

Web Dai – B-Money

I am fascinated by Tim May's crypto-anarchy. 

Unlike the communities
traditionally associated with the word "anarchy", in a crypto-anarchy the
government is not temporarily destroyed but permanently forbidden and
permanently unnecessary. 

It's a community where the threat of violence is
impotent because violence is impossible, and violence is impossible because its participants cannot be linked to their true names or physical locations.
 
Until now it's not clear, even theoretically, how such a community could operate. 

A community is defined by the cooperation of its participants, and efficient cooperation requires a medium of exchange (money) and a way to enforce contracts. 

Traditionally these services have been provided by the government or government sponsored institutions and only to legal entities. 

In this article I describe a protocol by which these services can be provided to and by untraceable entities.
 
I will actually describe two protocols. The first one is impractical,because it makes heavy use of a synchronous and unjammable anonymous
broadcast channel. However it will motivate the second, more practical protocol.

In both cases I will assume the existence of an untraceable network, where senders and receivers are identified only by digital
pseudonyms (i.e. public keys) and every messages is signed by its sender
and encrypted to its receiver.
 
In the first protocol, every participant maintains a (seperate) database of how much money belongs to each pseudonym. These accounts collectively define the ownership of money, and how these accounts are updated is the subject of this protocol.
 
1. The creation of money. Anyone can create money by broadcasting the
solution to a previously unsolved computational problem. The only
conditions are that it must be easy to determine how much computing effort
it took to solve the problem and the solution must otherwise have no
value, either practical or intellectual. The number of monetary units
created is equal to the cost of the computing effort in terms of a
standard basket of commodities. For example if a problem takes 100 hours
to solve on the computer that solves it most economically, and it takes 3
standard baskets to purchase 100 hours of computing time on that computer
on the open market, then upon the broadcast of the solution to that
problem everyone credits the broadcaster's account by 3 units.
 
2. The transfer of money. If Alice (owner of pseudonym K_A) wishes to
transfer X units of money to Bob (owner of pseudonym K_B), she broadcasts
the message "I give X units of money to K_B" signed by K_A. 
 
Upon the broadcast of this message, everyone debits K_A's account by X units and
credits K_B's account by X units, unless this would create a negative
balance in K_A's account in which case the message is ignored.
 
3. The effecting of contracts. A valid contract must include a maximum
reparation in case of default for each participant party to it. It should
also include a party who will perform arbitration should there be a
dispute. All parties to a contract including the arbitrator must broadcast
their signatures of it before it becomes effective. Upon the broadcast of
the contract and all signatures, every participant debits the account of
each party by the amount of his maximum reparation and credits a special
account identified by a secure hash of the contract by the sum the maximum
reparations. The contract becomes effective if the debits succeed for
every party without producing a negative balance, otherwise the contract
is ignored and the accounts are rolled back. A sample contract might look
like this:
 
K_A agrees to send K_B the solution to problem P before 0:0:0 1/1/2000.
K_B agrees to pay K_A 100 MU (monetary units) before 0:0:0 1/1/2000. K_C
agrees to perform arbitration in case of dispute. K_A agrees to pay a
maximum of 1000 MU in case of default. K_B agrees to pay a maximum of 200
MU in case of default. K_C agrees to pay a maximum of 500 MU in case of
default.
 
4. The conclusion of contracts. If a contract concludes without dispute,
each party broadcasts a signed message "The contract with SHA-1 hash H
concludes without reparations." or possibly "The contract with SHA-1 hash
H concludes with the following reparations: ..." Upon the broadcast of all
signatures, every participant credits the account of each party by the
amount of his maximum reparation, removes the contract account, then
credits or debits the account of each party according to the reparation
schedule if there is one.
 
5. The enforcement of contracts. If the parties to a contract cannot agree
on an appropriate conclusion even with the help of the arbitrator, each
party broadcasts a suggested reparation/fine schedule and any arguments or
evidence in his favor. Each participant makes a determination as to the
actual reparations and/or fines, and modifies his accounts accordingly.
 
In the second protocol, the accounts of who has how much money are kept by
a subset of the participants (called servers from now on) instead of
everyone. These servers are linked by a Usenet-style broadcast channel.

The format of transaction messages broadcasted on this channel remain the
same as in the first protocol, but the affected participants of each
transaction should verify that the message has been received and
successfully processed by a randomly selected subset of the servers.
 
Since the servers must be trusted to a degree, some mechanism is needed to
keep them honest. Each server is required to deposit a certain amount of
money in a special account to be used as potential fines or rewards for
proof of misconduct. Also, each server must periodically publish and
commit to its current money creation and money ownership databases. Each
participant should verify that his own account balances are correct and
that the sum of the account balances is not greater than the total amount
of money created. This prevents the servers, even in total collusion, from
permanently and costlessly expanding the money supply. New servers can
also use the published databases to synchronize with existing servers.
 
The protocol proposed in this article allows untraceable pseudonymous
entities to cooperate with each other more efficiently, by providing them
with a medium of exchange and a method of enforcing contracts. The
protocol can probably be made more efficient and secure, but I hope this
is a step toward making crypto-anarchy a practical as well as theoretical
possibility.
 
-------
 
Appendix A: alternative b-money creation
 
One of the more problematic parts in the b-money protocol is money
creation. This part of the protocol requires that all of the account
keepers decide and agree on the cost of particular computations.
Unfortunately because computing technology tends to advance rapidly and
not always publicly, this information may be unavailable, inaccurate, or
outdated, all of which would cause serious problems for the protocol.
 
So I propose an alternative money creation subprotocol, in which account
keepers (everyone in the first protocol, or the servers in the second
protocol) instead decide and agree on the amount of b-money to be created
each period, with the cost of creating that money determined by an
auction. Each money creation period is divided up into four phases, as
follows:
 
1. Planning. The account keepers compute and negotiate with each other to
determine an optimal increase in the money supply for the next period. 

Whether or not the account keepers can reach a consensus, they each
broadcast their money creation quota and any macroeconomic calculations
done to support the figures. 
 
2. Bidding. Anyone who wants to create b-money broadcasts a bid in the
form of <x, y> where x is the amount of b-money he wants to create, and y
is an unsolved problem from a predetermined problem class. Each problem in
this class should have a nominal cost (in MIPS-years say) which is
publicly agreed on.
 
3. Computation. After seeing the bids, the ones who placed bids in the
bidding phase may now solve the problems in their bids and broadcast the
solutions.
 
4. Money creation. Each account keeper accepts the highest bids (among
those who actually broadcasted solutions) in terms of nominal cost per
unit of b-money created and credits the bidders' accounts accordingly

http://www.weidai.com/bmoney.txt

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BitAddress

Open Source JavaScript Client-Side Bitcoin Wallet Generator

A Bitcoin wallet is as simple as a single pairing of a Bitcoin address with its corresponding Bitcoin private key. Such a wallet has been generated for you in your web browser and is displayed above.

To safeguard this wallet you must print or otherwise record the Bitcoin address and private key. It is important to make a backup copy of the private key and store it in a safe location. This site does not have knowledge of your private key. If you are familiar with PGP you can download this all-in-one HTML page and check that you have an authentic version from the author of this site by matching the SHA256 hash of this HTML with the SHA256 hash available in the signed version history document linked on the footer of this site. If you leave/refresh the site or press the “Generate New Address” button then a new private key will be generated and the previously displayed private key will not be retrievable. Your Bitcoin private key should be kept a secret. Whomever you share the private key with has access to spend all the bitcoins associated with that address. If you print your wallet then store it in a zip lock bag to keep it safe from water. Treat a paper wallet like cash.

Add funds to this wallet by instructing others to send bitcoins to your Bitcoin address.

Check your balance by going to blockchain.info or blockexplorer.com and entering your Bitcoin address.

Spend your bitcoins by going to blockchain.info and sweep the full balance of your private key into your account at their website. You can also spend your funds by downloading one of the popular bitcoin p2p clients and importing your private key to the p2p client wallet. Keep in mind when you import your single key to a bitcoin p2p client and spend funds your key will be bundled with other private keys in the p2p client wallet. When you perform a transaction your change will be sent to another bitcoin address within the p2p client wallet. You must then backup the p2p client wallet and keep it safe as your remaining bitcoins will be stored there. Satoshi advised that one should never delete a wallet.

Source:

https://www.bitaddress.org/

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Profitability Guide

Mining Profitability Guide

To calculate mining profitability, you should follow these steps, no matter which calculator you are using:

🔸️Be sure you know your GPU models and the Hash rates.

🔸️Be sure you know the algorithm of the coin.

🔸️Choose the exchange you plan to use for selling coins. This is necessary if you want more precise results.

🔸️Be sure you know your electricity cost.


You can find a list of calculators online that are used by miners, here:

https://bithouseco.home.blog/2021/09/12/mining-calculators/


🔹️ Be sure to keep track of what’s happening in the cryptocurrency world, if you aren’t doing so already. If a coin has problems, it will definitely affect the price and mining profitability, and may even prevent you from selling mined coins.

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Mining Calculators

How to Calculate Mining Profitability: Top 6 Mining Calculators

Before we can even start mining, we should use one of the many profitability calculators online, that should give us beforehand a better understanding if the GPU, FPGA, ASIC we choose to mine with, will be profitable or not!

🔹️ Online Calculators 🔹️

🔸️ WhatToMine

🔸️ Rubin Mining Calculator

🔸️ CoinWarz

🔸️ CryptoCompare

🔸️ Minerstat

🔸️ Crypto-Coinz

Before even entering sites to buy hardware, Do GOOD…

Do VERY GOOD your R&D

If you think reading is for dorks,nerds, geeks and boring people … Well…

WELCOME TO THE REALM OF THOSE WHO ❤ TO READ !!!

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Bitcoin Quotes

Bitcoin Quotes from around the World

“Bitcoin actually has the balance

and incentives right, and that is why

it is starting to take off. “

Julian Assange

Bitcoin has the balance and incentives right

” It isn’t obvious that the world had to work this way.

But somehow the universe smiles on encryption.”

Julian Assange

The universe smiles on encryption

” The innovation is that BTC is hard to shut down. […]

Designed from the ground up to survive under the most adversarial conditions. “

Hasu

Bitcoin is hard to shut down

” Bitcoin is the most successful privacy coin to date. “

Pierre Rochard

Most successful privacy coin to date

” Bitcoin is a mathematical miracle. “

Steve Wozniak (Apple Co-Founder)

Mathematical miracle

” Bitcoin is a technological innovation that happens once a species. “

Trace Mayer

Technological innovation that happens once in a species

” Bitcoin doesn’t care about who you are or what your feelings are.

Bitcoin represents equal opportunity

to participate in a system

not encumbered by

our legacy fiat structures. “

White Rabbit

Participate in a system not encumbered by FIAT

” We’re here to unfuck the money and there’s no stopping us.

Fix the money,

change the world. “

White Rabbit

Fix the Money, Change the World

” Hardly anybody actually

understands money. “

Nick Szabo

Nobody understands money

” When you have a disruptive technology,

they call it a category killer.

Bitcoin is a serial killer –

it’s going to go through

40 or 50 different industries. “

Dan Morehead

Bitcoin is a serial killer

” It’s 21 million or death.”

Robert Breedlove

21 million or death

” It might make sense just to get some in case it catches on. “

Satoshi Nakamoto

In case it catches on

” Trusted third parties

are security holes. “

Nick Szabo

Trusted third parties

” There are only going to be

21 million coins,

there are billions of people

in the world, some reasonable percentage of who might

find it interesting to

own a piece of Bitcoin.”

Adam Back

21 Million Coins

” I think it’s essential for a program of this nature to be open source. “

Satoshi Nakamoto

Open Source

” SHA-256 is very strong. It’s not like the incremental step from MD5 to SHA1.

It can last several decades unless there’s some massive breakthrough attack. “

Satoshi Nakamoto

Sha-256

” Code mixed with robust game theory is superior to hierarchical command and control. “

ℭoinsure

Code superior to hierarchical command and control

” Given that money is one half of every commercial transaction and that whole civilizations literally rise and fall based on the quality of their money, we are talking about an awesome power, one that flies under the cover of night. “

Ron Paul

Money… an awesome power

” The world has to adapt to bitcoin, not the other way round. “

Herzmeister

The world has to adapt to bitcoin

” When I first bought bitcoin it took me two years of speculation to understand what Bitcoin really was.

But once I fully had a grasp of it, it was life altering. “

Russell Okung

Bitcoin is life altering

” Many countries stand to gain from Bitcoin’s adoption as it would remove their dependence on the US dollar and provide them with a feasible alternative. “

Misir Mahmudov

Bitcoin a feasible alternative to the US $

” Bitcoin is a optimist bet on the future, a bet on human ingenuity.

Gold is a pessimist bet on the past and, often a bet the end of civilization. “

Rodolfo Novak

Bitcoin a bet on Human Ingenuity

” Everyone has got to believe in something.

Why not believe in something verifiable and unforgeable. “

Hass McCook

Believe in something verifiable and unforgeable

” Open source software is a meritocracy of ideas, not of people.

So people are always talking about “Who controls Bitcoin?”

Good ideas control Bitcoin.

Not people.”

Ben Prentice

Good ideeas control Bitcoin

“Bitcoin is a seed of hope in a society which lost vision years ago and perspective just recently. “

Kim Neunert

Bitcoin a seed of hope

” Bitcoin has an inescapable, unavoidable, and omnipotent magnetism for the brightest and most revolutionary minds on the planet.

I’ve never witnessed anything like it. “

Brandon Bridge

Bitcoin’s magnetism

” This is why proof of work needs to be expensive, if it is cheap you can roll back things easily.

You want it to be very difficult to change history.

The only way to make it difficult to change history is to make the process of writing the current history very expensive. “

Jimmy Song

Difficult to change history

” Bitcoin is like gold but with this magical ability that you

can teleport it.”

Vijay Boyapati

Bitcoin magical ability to teleport it

” Can Bitcoin be stopped?

“Not really, this thing is a beast.

As Mises wrote:

Ideas can only be overcome by other ideas. “

Trace Mayer

Bitcoin cannot be stopped

“I’m not here to fix Bitcoin.”

Michael Saylor

Fix bitcoin

” Buying bitcoin is the most powerful protest an individual can make against the current economic system. “

Luc Dossis

Buying bitcoin is the most powerful protest

” These numbers have nothing to do with the technology of the devices; they are the maximums that thermodynamics will allow.

And they strongly imply that brute-force attacks against 256-bit keys will be infeasible until computers are built from something other than matter and occupy something other than space. “

Bruce Schneier

Maximums that thermodynamics will allow

” Cryptocurrency is such a powerful concept that it can almost

overturn governments. “

Charles Lee

Cryptocurrency can almost overturn governments

” Bitcoin will do to banks what email did to the postal industry. “

Rick Falkvinge

Bitcoin is the email for the postal industry

” I do think Bitcoin is the first [encrypted money] that has the potential to do something like change the world. “

Peter Thiel

Bitcoin has the potential to change the world

” Bitcoin is the most important invention in the history of the world since the Internet. “

Roger Ver

Bitcoin the most important invention in the history since the Internet

” Gold is a great way to preserve wealth, but it is hard to move around. You do need some kind of alternative and Bitcoin fits the bill. “

Jim Rickards

Bitcoin fits the bill as a way to preserve wealth

” You can’t stop things like Bitcoin.

It will be everywhere and the world will have to readjust.

World governments will have to readjust. “

John McAfee

Bitcoin will be everywhere and the world will have to readjust

” I think the fact that within the bitcoin universe an algorithm replaces the function of the government… is actually pretty cool. “

Al Gore

An algorithm replaces the function of government

“People have made fortunes off Bitcoin, some have lost money.

It is volatile, but people make money off of volatility too.”

Richard Branson

Some lost, some won with Bitcoin

” The ability to create something which is not duplicable in the digital world has enormous value…

Lot’s of people will build businesses on top of that. “

Eric Schmidt

Create something wich is not duplicable

“PayPal had these goals of creating a new currency.

We failed at that…

I think Bitcoin has succeeded on the level of a new currency, but the payment system is lacking.”

Peter Thiel

Bitcoin succeeded as a new currency

” As people move into Bitcoin for payments and receipts they stop using US Dollars, Euros and Chinese Yuan which in the long-term devalues these currencies. “

John McAfee

Bitcoin devalues $ € ¥

” Bitcoin is the Currency of Resistance…

If Satoshi had released Bitcoin 10 years earlier, 9/11 would

never have happened. “

Max Keiser

Bitcoin the currency of resistance

“At its core, bitcoin is a smart currency, designed by very forward-thinking engineers. “

Peter Diamandis

Bitcoin is a smart currency

“The internet is going to be one of

the major forces for reducing

the role of government.

One thing that’s missing but that

will soon be developed,

is a reliable  e-cash.”

Milton Friedman

E-Cash

” Bitcoin is a technological

tour de force. “

Bill Gates

Tour de force

” If you don’t believe it or don’t get it,

I don’t have the time

to try to convince you,

sorry. “

Satoshi Nakamoto

Don’t have the time

“WikiLeaks has kicked the hornet’s nest, and the swarm is headed towards us.”

Satoshi Nakamoto

WikiLeaks

” Lost coins only make everyone

else’s coins worth slightly more.

Think of it as a donation to everyone.”

Satoshi Nakamoto

Lost Coins

” In a few decades when the reward gets too small, the transaction fee

will become the main compensation

for [mining] nodes.

I’m sure that in 20 years there

will either be very large transaction volume or no volume.”

Satoshi Nakamoto

Transaction fee

” As computers get faster and the total computing power applied to creating bitcoins increases, the difficulty increases proportionally to keep the total new production constant.

Thus, it is known in advance how many new bitcoins will be created every year in the future.

Coins have to get initially distributed somehow, and a constant rate seems like the best formula.”

Satoshi Nakamoto

Coins distribution at a constant rate is the best formula

” Bitcoin is the beginning of something great: a currency without

a government, something

necessary and imperative. “

Nassim Taleb

Bitcoin a currency without a government

” Those who believe in Bitcoin also believe in cleverness. “

Arif Naseem

Believe in bitcoin believe in cleverness

” Bitcoin is the most stellar and

most useful system of

mutual trust ever devised. “

Arif Naseem

Bitcoin a system of mutual trust

Cryptocurrency is freedom,

Banking is slavery. “

Arif Naseem

Cryptocurrency is freedom

” Our basic thesis for bitcoin is

that it is better than gold. “

Tyler Winklevoss

Bitcoin better than gold

” I think the whole narrative

of blockchain without bitcoin

will amount to very little. “

Fred Ehrsam

Blockchain without bitcoin

” Every informed person needs to know about Bitcoin because it might be one of the world’s most important developments. “

Leon Louw

Bitcoin world’s most important developments

” Bitcoin is a very exciting development, it might lead to a world currency.

I think over the next decade it will grow to become one of the most important ways to pay for things and transfer assets. “

Kim Dotcom (CEO of MegaUpload) 

Bitcoin might lead to a world currency

” Bitcoin may be the TCP/IP of money. “

Paul Buchheit (Creator of Gmail)

Bitcoin the TCP/IP of money

” We have elected to put our money and faith in a mathematical framework that is free of politics and human error. “

Tyler Winklevoss (Co-inventor of Facebook)

Mathematical framework free of politics and human error

” I really like Bitcoin.

I own Bitcoins.

It’s a store of value, a distributed ledger.

It’s a great place to put assets, especially in places like Argentina with 40 percent inflation, where $1 today is worth 60 cents in a year, and a government’s currency does not hold value.

It’s also a good investment vehicle if you have an appetite for risk.

But it won’t be a currency until volatility slows down. “

David Marcus (CEO of Paypal)

Bitcoin a store of value

” [Virtual Currencies] may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system. “

Ben Bernanke (Chairman of the Federal Reserve)

Bitcoin may hold long-term promise

“There are 3 eras of currency: Commodity based, politically based, and now, math based. “

Chris Dixon (Co-founder of Hunch now owned by Ebay, Co-founder of SiteAdvisor now owned by McAfee)

Math based currency

” Bitcoin is here to stay.

There would be a hacker uproar to anyone who attempted to take credit for the patent of cryptocurrency.

And I wouldn’t want to be on the receiving end of hacker fury. “

Adam Draper

Bitcoin is here to stay

” It’s money 2.0, a huge hugehuge  deal. “

Chamath Palihapitiya (Previous head of AOL instant messenger)

Money 2.0

” If there is one positive takeaway from the collapse of Mt.Gox, it is the willingness of a new generation of Bitcoin companies to work together to ensure the future of Bitcoin and the security of customer funds. “

Brian Armstrong (CEO of Coinbase)

Future of bitcoin

” Bitcoin seems to be a very promising idea.

I like the idea of basing security on the assumption that the CPU power of honest participants outweighs that of the attacker.

It is a very modern notion that exploits the power of the long tail. “

Hal Finney

Bitcoin a very promising idea…

” Bitcoin enables certain uses that are very unique.

I think it offers possibilities that no other currency allows.

For example the ability to spend a coin that only occurs when two separate parties agree to spend the coin; with a third party that couldn’t run away with the coin itself. “

Pieter Wuille

Bitcoin enables uses that are very unique

” At its core, bitcoin is a smart currency, designed by very forward-thinking engineers.

It eliminates the need for banks, gets rid of credit cardfees, currency exchange fees, money transfer fees, and reduces the need for lawyers in transitions… all good things. “

Peter Diamandis

Good things

” There is so much potential…

I am just waiting for it to be a billion dollar industry.”

“ Wow, Silk Road actually works ”

Charlie Shrem

Silk Road actually works

Bitcoin is independent from “crypto”

Bitcoin vs “Crypto“

@bithouseco

   The quality of Bitcoin’s monetary policy and the public’s confidence that the policy will be respected in the long-run is all what really matters.

For all of you out there, who believe that Bitcoin falls under the “crypto” umbrella, you could not be further from the truth.

“Crypto” is designated for the affinity scams that launched in Bitcoin’s shadow and attempted to leverage its pedigree and latch on to its narrative to sell useless tokens to unwitting noobs.

The scammers believe they can “beat” Bitcoin by providing a feature set and a “culture” more appealing to the masses and make individuals more likely to pick their favorite “crypto” over the best money humans have ever come in contact with.

As most people, these people couldn’t be more delusional.

The success of Bitcoin doesn’t depend on the “culture” of bitcoiners.

Bitcoin is a protocol that has no way of knowing the “culture” of its users.

If it is successful it will be used by many different people from many worldwide  lands with very different cultures.

A cultural hold on a particular competitive landscape of social media doesn’t really impress no one at the end of the day.

What really matters is the quality of Bitcoin’s monetary policy and the public’s confidence that the policy will be respected in the long-run.

The best way to build confidence in that policy is to make the cost of attempting to change that policy, or falling out of line with the consensus rules of the network as high as possible.

Nothing in “crypto” comes close to Bitcoin in these regards, and that is because the Bitcoin network is slowly but surely integrating itself into the energy sector of the globe.

The execution risks associated with mining Bitcoin have become very high.

If a miner fucks up and falls out of consensus, they are punished materially by missing out on precious block reward payouts.

As the network becomes more integrated with the energy sector, these costs will rise and abiding by the monetary policy put forth by the network of full nodes will be paramount.

It happend in 2017 when the biggest corporate players and miners attempted to hard fork a block space increase that fell out of consensus with the full nodes on the network.

The unwillingness to follow consensus ruined reputations and lost a lot of miners a lot of money over the four years that have followed the hard fork.

This is the certainty for the people, that bitcoin is a suitable monetary good in the digital age.

All of “crypto” pretenters focused on speed, app building, and being less “energy intensive” have completely missed the plot and have relegated themselves to a hedonistic odd sand box filled with degenerate gamblers and low energy thinkers.

Bitcoin has already won because it has won the energy game.

This energy game is what will protect Bitcoin’s monetary policy in the long-run, being strongly incentivized by full nodes to do so.

Very few understand this and very few will ever understand that !!!

Bitcoin

₿

Bitcoin is a decentralized digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: transaction management and money issuance are carried out collectively by the network.

The original Bitcoin software by Satoshi Nakamoto was released under the MIT license. Most client software, derived or “from scratch”, also use open source licensing.

Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.

The cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto.

The currency began use in 2009 when its implementation was released as open-source software.

Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services, but the real-world value of the coins is extremely volatile.

Bitcoin is the first successful implementation of a distributed crypto-currency, described in part in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities.

Bitcoins have all the desirable properties of a money-like good. They are portable, durable, divisible, recognizable, fungible, scarce and difficult to counterfeit.

Bitcoin has been criticized for its use in illegal transactions, the large amount of electricity (and thus carbon footprint) used by mining, 
price volatility, and thefts from exchanges.

Some economists and commentators have characterized it as a speculative bubble at various times.

Bitcoin has also been used as an investment, although several regulatory agencies have issued investor alerts about bitcoin.

Research produced by the University of Cambridge estimated that in 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.

Why?

bitcoin facts

Bitcoin is P2P electronic cash that is valuable over legacy systems because of the monetary autonomy it brings to its users.

Bitcoin seeks to address the root problem with conventional currency: all the trust that’s required to make it work — Not that justified trust is a bad thing, but trust makes systems brittle, opaque, and costly to operate.

Trust failures result in systemic collapses, trust curation creates inequality and monopoly lock-in, and naturally arising trust choke-points can be abused to deny access to due process.

Through the use of cryptographic proof, decentralized networks and open source software Bitcoin minimizes and replaces these trust costs.

Bitcoin Transactions are:

  • Permissionless and borderless. The software can be installed by anybody worldwide.
  • Anonymous. Bitcoin does not require any ID to use making it suitable for the unbanked, the privacy-conscious, computers or people in areas with underdeveloped financial infrastructure.
  • Private. When used with care bitcoin can support strong financial privacy.
  • Censorship-resistant. Nobody is able to block or freeze a transaction of any amount.
  • Fast. Transactions can be made almost as fast as data can travel over the Internet.
  • Cheap. Fees can be very very low.Irreversible once settled, like cash. (but consumer protection is still possible.)
  • Online and available 24 hours a day, 365 days per year.
How a Bitcoin transaction works

Bitcoin can also be a store of value, some have said it is a “swiss bank account in your pocket”.

Stored Bitcoins:

  • Cannot be printed or debased. Only 21 million bitcoins will ever exist.
  • Have no storage costs. They take up no physical space regardless of amount.
  • Are easy to protect and hide. Can be stored on a phone, computer, encrypted on a paper backup or memorized in your head.
  • No counterparty risk. If you keep the private key of a bitcoin secret and the transaction has enough confirmations, then nobody can take them from you no matter for what reason, no matter how good the excuse, no matter what.
  • Can be under divided possession with Multisignature. For example with a 2-of-3 multisig scheme there would be three private keys, of which any two is enough to spend the money. Those three keys can be spread anywhere, perhaps in multiple locations or known by multiple people. No other asset does this, for example you cannot hold gold coins under multisig.

What is Bitcoin?

People’s Currency

A. Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.

What is Bitcoin

How does Bitcoin work?

Bitcoin Genesis Block
Asics Mining Farm

A. Bitcoin uses public-key cryptography, peer-to-peer networking, and proof-of-work to process and verify payments. Bitcoins are sent (or signed over) from one address to another with each user potentially having many, many addresses. Each payment transaction is broadcast to the network and included in the blockchain so that the included bitcoins cannot be spent twice. After an hour or two, each transaction is locked in time by the massive amount of processing power that continues to extend the blockchain. Using these techniques, Bitcoin provides a fast and extremely reliable payment network that anyone can use.

Future of Bitcoin

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