It’s worth more than an ounce of
gold right now. It’s completely Digital and it’s the currency of choice for the
cyber attackers who crippled computer networks around the world in recent days.
When the attackers' "ransomware'' sprang into action, it held victims
hostage by encrypting their data and demanding they send payments in Bitcoins
to regain access to their computers. Bitcoin has a fuzzy history, but it's a
type of currency that allows people to buy goods and services and exchange
money without involving banks, credit card issuers or other third parties.
How Bitcoins work – Bitcoin is a
digital currency that is not tied to a bank or government and allows users to
spend money anonymously. The coins are created by users who ‘mine’ them by
lending computing power to verify other user’s transactions. They receive Bitcoins
in exchange. The coins also can be bought and sold on exchanges with U.S
dollars and other currencies.
Why are Bitcoins popular? - Bitcoins
are basically lines of computer code that are digitally signed each time they
travel from one owner to the next. Transactions can be made anonymously, making
the currency popular with libertarians as well as tech enthusiasts, speculators
and criminals.
Is it really anonymous - Yes, to a
point. Transactions and accounts can be traced, but the account owners aren't
necessarily known. However, investigators might be able to track down the
owners when Bitcoins are converted to regular currency. For now, the three
accounts tied to the ransomware attack appear untouched and it'll be difficult
for perpetrators to cash in anytime soon without getting traced.
Who's using bitcoin? - Some
businesses have jumped on the bitcoin bandwagon amid a flurry of media
coverage. Overstock.com accepts payments in bitcoin, for example. The currency
has become popular enough that more than 300,000 daily transactions have been occurring
recently, according to bitcoin wallet site blockchain.info. A year ago,
activity was closer to 230,000 transactions per day. Still, its popularity
is low compared with cash and cards, and many individuals and businesses won't
accept Bitcoins for payments.
How Bitcoins are kept secure? - The
bitcoin network works by harnessing individuals' greed for the collective good.
A network of tech-savvy users called miners keep the system honest by pouring
their computing power into a Blockchain, a global running tally of every
bitcoin transaction. The Blockchain prevents rogues from spending the same
bitcoin twice, and the miners are rewarded for their efforts by being gifted
with the occasional bitcoin. As long as miners keep the Blockchain secure,
counterfeiting shouldn't be an issue.
How bitcoin came to be - It's a
mystery. Bitcoin was launched in 2009 by a person or group of people operating
under the name Satoshi Nakamoto. Bitcoin was then adopted by a small clutch of
enthusiasts. Nakamoto dropped off the map as bitcoin began to attract widespread
attention. The currency obeys its own internal logic.
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