VIRTUALLY ANONYMOUS

What is bitcoin?

Bitcoin is a digital currency that is not tied to any bank. Like cash, it lets users spend or receive money anonymously, or mostly so. Like other online payment services, it lets them do so over the internet. There are several other virtual currencies, such as ethereum, but bitcoin is the most popular. Bitcoins are basically lines of computer code that are digitally signed each time they travel from one owner to the next. Transactions can be made anonymously, making the currency popular with tech enthusiasts, speculators – and criminals.

How is bitcoin mined?

Tech-savvy users called “miners” use computers to make complex calculations that verify transactions in bitcoins. This “blockchain” is a global running tally of every bitcoin transaction. The miners receive bitcoins in exchange. NiceHash, a company in Slovenia that mines, said it had been hacked for a potential loss of tens of millions of dollars. The company made a business from matching people with spare computing power to those wanting to mine bitcoin.

How are bitcoins kept safe?

Because the blockchain is verified constantly by a network of miners, rogues cannot spend the same bitcoin twice. As long as miners keep the chain secure, counterfeiting should not be an issue.

How did bitcoin begin?

It is a mystery. Bitcoin was launched in 2009 by a person or group of people using the name Satoshi Nakamoto. It was then adopted by a clutch of enthusiasts. Nakamoto dropped off the map as bitcoin began to attract attention. But proponents say that does not matter. The currency obeys its own internal logic.