BITCOINS - AN INTRODUCTION

The future of trading, bitcoins. It's a topic which is the talk of the town and it is also one of the least understood topics.

What exactly is bitcoins and who started it?

Bitcoins were started by Satoshi Nakamoto in the year 2009. Bitcoins are a way of online transaction which involves a peer-to-peer based payment system, where transaction takes place between the users directly.

In different countries, for example in India we have the RESERVE BANK OF INDIA (RBI) which is the regulatory body of the Indian currency, but, bitcoins follow a decentralized architecture. This means that there is no regulatory body, which looks after various aspects of bitcoins, for example, deciding when to produce bitcoins, tracking bitcoins etc.

Bitcoins are regarded as the world's first cryptocurrency. Now the question arises, if there is no one to regulate the working of bitcoins, how can't anyone reproduce it, or in other words, duplicate it?

Bitcoins aren't like regular files which can be duplicated but it's basically an entry on a huge global ledger which is called the blockchain. The blockchain has the information of each and every, yes, each and every bitcoin exchange which has happened till date.

There is no fixed or official group of people who look after the working of the blockchain, for example, updating it, and tracking money etc. On the contrary, anybody can volunteer to do this, and they are called miners. The miners spend thousands of dollars on computers which can solve math problems (cryptographic hash functions) and add the block of transactions to the chain. (We will discuss Bitcoin Mining and how to set up your own mine, some other day so that you can earn a neat profit)

Bitcoins are quite secure and use the system of keys to ensure that the correct person is sending the correct amount of bitcoins to the correct receiver.

The future of bitcoins is a hotly debated topic. Stay tuned for our coming posts. Also, if you are willing to spend thousands of dollars to create a bitcoin mine then you can earn a pretty neat profit in the long run.

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