Crypto Currency (Bitcoins)

Crypto Currency (Bitcoins)

Evolution of currency

To understand Bitcoin let us first understand what crypto currency is and block chain.                          

Cryptocurrency (or crypto currency)

It is a virtual currency designed to work as a medium of exchange using cryptography to secure the transaction, to control the creation of additional units and to verify the transfer of assets. It is also called as digital currency.

Block chain

Block chain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. By design, block chains are inherently resistant to modification of the data. It is defined as an open, distributed ledger that can record transactions between two parties peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.

Bitcoin:

It is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency – the system works without a central source or single administrator. The network is peer-to-peer and transactions take place between users directly through the use of cryptography, without a middle men. These transactions are verified by network nodes and recorded in a public distributed ledger called a block chain. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamotoand released as open-source software in 2009.

Bitcoin payments are processed through a private network of computers linked through a shared program. Each transaction is simultaneously recorded in a "blockchain" on each computer that updates and informs all accounts.

Bitcoin is beneficial for the individual but for the country it is a threat.

·       User Anonymity- Unless a user voluntarily publishes his Bitcoin transactions, his purchases are never associated with his personal identity

·       No Third-party Interruptions- governments, banks and other financial intermediaries have no way to interrupt user transactions or place freezes on Bitcoin accounts

·       Purchases Are Not Taxed-Bitcoin is that sales taxes are not added onto any purchases.

·       Very Low Transaction Fees- Since Bitcoin transactions have no intermediary institutions or government involvement, the costs of transacting are kept very low

Some important facts about Bitcoin

A darknet market or cryptomarket is a commercial website that operates via darknets such as Tor or I2P.They function primarily as black markets, selling or brokering transactions involving drugs, cyber-arms, weapons, counterfeit currency, stolen credit card details, forged documents, unlicensed pharmaceuticals, steroids,  and other illicit goods as well as the sale of legal products- Bitcoin is the currency which is used to transact in the darknet market.

Hackers love bitcoins for ransom demands (Ransomware,  WannaCry cyber-attack…) Because it can be used to pay for goods and services, can be purchased through exchanges, all without revealing personal information