Digi­ti­sa­tion of coinage

The Guardian - - NEWS -

Bit­coin is a dig­i­tal cur­rency started in 2009 by a mys­tery fig­ure named Satoshi Nakamoto, whose true iden­tity is still un­known. It is un­like tra­di­tional cur­ren­cies be­cause it has no cen­tral bank, na­tion state or reg­u­la­tory author­ity back­ing it up.

To spend them, users buy bit­coin and con­duct trans­ac­tions with them us­ing ex­changes such as San Fran­cisco-based Coin­base. Rather than a cen­tral author­ity val­i­dat­ing trans­ac­tions, they are all recorded on a pub­lic ledger, called the blockchain.

Bit­coin has a fi­nite sup­ply of 21m of which more than 15m are in cir­cu­la­tion, which sup­port­ers claim make it more sta­ble than gov­ern­ment-backed cur­ren­cies that can be de­val­ued by cen­tral banks print­ing money. How­ever, it has been very volatile.

Bit­coin are dig­i­tal keys stored in a “dig­i­tal wal­let”, which ex­ists ei­ther in the cloud or on com­put­ers, and can be linked to bank ac­counts. Typ­i­cally, you can pay by bank trans­fer, mo­bile pay­ments or with a Visa or Master­card. There are also bit­coin ATMs, which al­low for bit­coin to be ex­changed for cash.

A grow­ing list of firms ac­cept Bit­coin, in­clud­ing Tesla and Mi­crosoft, but it is of­ten used as an anony­mous way to carry out large cross-bor­der money trans­fers, so has be­come linked to drug deal­ing and money laun­der­ing.

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