Bitcoin

The cryprocurrency known as Bitcoin is the first decentralized cryptocurrency which means that it is the first payment system without a person or people running every transaction . Bitcoin was created by an unknown person or group of people under the name Satoshi Nakamoto and was released as open source software in 2009 . Bitcoins are created as a reward for a process known as mining in which people known as miners use big computers to solve an encryption problem that I will get more into in the next paragraph .

 

Bitcoin is a ledger that is kept track of by miners . Miners keep track of groups of transactions called blocks . Miners use special software on their computers that sift through huge numbers of possibilities to crack an encryption scheme known as RSA256 . Around every 10 minutes one of them gets it correct and their block gets added to the end of the ledger . Every transaction in Bitcoin has the Bitcoin address of the sender , the Bitcoin address of the receiver , the amount which are all encrypted with the sender’s secret key .

 

One of the risks associated with Bitcoins is that they are very volatile . What this means is that the price of Bitcoins can change very drastically . Sometimes they can lose or gain 25 percent of their value in minutes ! Another risk is hackers . One way that hackers can affect Bitcoin is by stealing online Bitcoin wallets . Another risk is when hackers hijack the Bitcoin exchanges . These Bitcoin exchanges are supposed to exchange Bitcoins for real money but if a hacker hacks it then they can get all of the Bitcoin for themselves .

 

I think that in the future Bitcoin or some other decentralized cryptocurrency may become the norm . What I mean by that is , I think that in the future maybe everybody will use cryptocurrencies instead of real money to purchase items in the real world . Although it may just turn into a place where hackers exchange digital money and information . One reason that I think this may happen is because on Bitcoin you are anonymous and usually hackers like being anonymous because then they cannot be persecuted for their crimes .

 

 

 

 

 

THE END!

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