Bitcoin

What is a Bitcoin?
Bitcoin is an innovative payment network and a new kind of money. It is the first decentralized, open source, peer-to-peer payment network that is powered by its users with no central authority or middlemen.

 From a user perspective, Bitcoin is pretty much like cash for the Internet. The currency is generated through a computer program and can be converted into cash after being deposited into virtual wallets. It is a Cryptocurrency (type of digital currency)

When Bitcoin was launched?

Bitcoin was set up in 2009 by a mysterious individual or group with the pseudonym Satoshi Nakamoto, whose true identity is yet to be revealed and who left the project in 2010.

 That software is now maintained by an opensource community coordinated by developers.

How does Bitcoin work?

It exists through an opensource software program and its supply is controlled by a computer algorithm. The creators have fixed the supply of bitcoins to around 21 million, and no new bitcoins can be added into the supply.

 As a new user, you can get started with Bitcoin without understanding the technical details. Once you have installed a Bitcoin wallet on your computer or mobile phone, it will generate a pair of unique, mathematically linked keys.

 One key is private and kept hidden on your computer.

The other is public and known as Bitcoin address. You can disclose your addresses to your friends so that they can pay you or vice versa. A Bitcoin address is similar to a physical address or an email.

 An important difference, however, is that each address should only be used for a single transaction.

How to transfer Bitcoins?

A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. When you perform a transaction, your Bitcoin software performs a mathematical operation.

To combine the other party's public key and your own private key with the amount of Bitcoins that you want to transfer.
The result of that operation is then sent out across the distributed Bitcoin network so the transaction can be verified by Bitcoin software clients not involved in the transfer.

All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining. Bitcoin mining is the process of making computer hardware do mathematical calculations for the Bitcoin network to confirm transactions and increase security.

Who controls the Bitcoin network?

It is controlled by all Bitcoin users around the world. While developers improve the software, they can't force a change in the Bitcoin protocol because the virtual currency can only work correctly only if there is a consensus among all users.

How to purchase Bitcoin?

The most common way to buy bitcoins are the Bitcoin Exchanges as: Mt. Gox provide a place for people to trade Bitcoins for other types of currency.
24change, An automated buy/sell Bitcoin service.

 VirWoX is currently the only exchange where you can buy BTC with PayPal and Credit Cards (among other payment methods).

Advantages of Bitcoin:
Payment freedom Fewer risks for merchants

Security and control

Transparent and neutral

Disadvantages of Bitcoin:
Low degree of acceptance Less volatility Ongoing development

Summary Analysis
The true nature of Bitcoins exponential growth has been on full display over the past few weeks as global interest and media coverage increases with each passing day. It's also soaring in value, with a single Bitcoin surpassing $1,000 (613) for the first time in November.

 It is assumed that Bitcoin will be the hottest investment in 2014. It is widely used in China, Australia, Norway, New Zealand and in other countries.

 Merchants have an incentive to accept the currency because transaction fees are lower than the 2 to 3% typically imposed by credit card processors. In Pakistani 1 Bitcoin is equal to Rs. 76,216.92 on 17 December 2013.

 But in opposite side Bitcoins fuelling rise in cyber attacks.

In 2013 the FBI shut down the Silk Road online black market and seized US$28.5 million worth of Bitcoin from the alleged mastermind. It is also said that Bitcoin dont fall under the usual definition of money or currency.

It is now prohibited for Chinese financial banks to operate using bitcoins or for bitcoins to be used as legal tender currency. Commercial use of Bitcoin, illicit or otherwise, is currently small compared to its use by speculators, which has fueled price volatility.

 According to the financial analysts, it can go to $4000 or it can go to $ 4 in near future.