You can’t hold a bitcoin, but the website currency’s value has skyrocketed. Why?
What is bitcoin?
The bitcoin is type of digital currency created in 2009. They aren’t printed, like dollars, and exist only electronically. The system has no centralized control, and is an open network managed by its users. Are bitcoins safe? Security researchers say bitcoins are impossible to counterfeit. Bitcoin transactions are encrypted. The decentralized platform is continuously updated by thousands of computers. Experts say the system would fail only if the global Internet went dark since the database is held simultaneously on computers all over the world. Yet the use of bitcoin is still seen as a big economic experiment.
Why is the value of bitcoin soaring?
Bitcoin is still an emerging technology, and trades on the open market subject to supply and demand. Demand has risen sharply in the past six months, driving the price of a single bitcoin well over $2,000. Some see market speculation at work.
How do you spend bitcoins?
One needs a mobile app or a computer to send bitcoin, much as you do when sending cash digitally. You keep bitcoin in digital “wallets,” which are like virtual accounts. But bitcoins doesn’t actually move around the Internet. Rather, the bitcoin system maintains a continuously updated ledger maintained on thousands of host computers around the world.
What is the blockchain?
The platform upon which bitcoin rests is a sprawling ingenious database that keeps track of every transaction ever made. Each transaction is timestamped and is linked, or chained, to earlier transactions. A blockchain, then, is a list of all past transactions. One could follow the chain all the way back to a bitcoin’s origin.
Why is blockchain technology promising?
The tamper-resistant technology under bitcoin is considered disruptive to many sectors of the global economy. To use the technology, parties must collaborate and mutually verify transactions. Experts say it could take away the need for trusted third parties, or middlemen, in a variety of industries, including finance, real estate and entertainment, Moreover, the technology could streamline manufacturing and logistical supply chain processes by adding transparency to the way goods and services are created and move through the economy.
– Tim Johnson/TNS