Bitcoin (Cryptocurrency): Essays

Various Essays on Bitcoin (cryptocurrency).

Bitcoin: Currency of the Internet (362 words)

Many feel that Bitcoin is the currency of the Internet, and will provide complete freedom from government & banks rule (all over the world). While the world is not there yet, here’s more on ‘What Bitcoin is’.

You can hear about Bitcoin in the news, every-time the currency’s exchange rate hits new highs (or lows) against real-world monies. Here’s more about this instant, peer-to-peer transaction.

Bitcoin is a peer-to-peer digital currency that functions without the intervention of a central authority. Its also called a cryptocurrency because it is decentralized and uses cryptography to control transactions and prevent double-spending, a problem for digital currencies. Cryptocurrency means an encrypted digital currency that can be transmitted and validated through a specific process generally referred to as mining.

It seems to be gaining in popularity these days because of its ease of use; some also like the fact that you can remain anonymous.

Its basically a peer-to-peer computer network made up of its users’ machines, similar to BitTorrent, a file-sharing system. New Bitcoins are minted, or “mined”, as the computers in this network execute hard number-crunching tasks. The entire network is then used to monitor and verify both the creation of new Bitcoins through mining and the transfer of Bitcoins between users.

Its instant, peer-to-peer transaction, you can do worldwide payments and has zero/low processing fees.

Taking a look at Safety & Security, we all know that most forms of online ID are verified using internet identities such as email addresses, social media accounts, and so on, which can be cracked, hijacked or forged.

That’s why Bitcoin transactions rely on cryptography and other means to make them safe. Only a fraudster who controls more than half of the network’s total number-crunching capacity (a very tall order) could probably be able to do some damage.

Like account-passwords for most sites, private keys are also vulnerable if stored in online Bitcoin wallets (which have been hacked); much less so if maintained on a user’s computer (since hacking a particular desktop, while not impossible, is harder than inflitrating the cloud). Serious Bitcoin users anyway keep their private keys in “cold” storage on unpowered hard drives that are never linked up directly to internet-connected computers.

All you should know about Cryptocurrency (270 words)

This is a brief overview on cryptocurrency that provides an understanding of how electronic cash works. Cryptocurrency continues to develop and remains a promising financial system with many prospects for the future. Bitcoin is a type of cryptocurrency.

All confirmed transactions using cryptocurrency are kept in public ledgers. The identity of the user generally remains confidential and the public ledger makes sure that the relevant balance of the user is calculated correctly. The new transactions are usually monitored in order to make sure that the user of the digital wallet spends only the coins he/she owns. Transaction refers to the transition of money between two e-wallets. The process of transaction confirmation usually takes several minutes. Mining refers to the procedure of approving the transaction and transferring them to the public ledger. The mining procedure adds value to cryptocurrency and is generally referred to as a proof-of-work system. Coins are generated by so-called miners, who operate software and hardware intended for dealing with the proof-of-work systems. The work of these individuals is what gives value to the digital coins, and at the same time, the rarity and demand for coins are what causes the fluctuations in their value.

Cryptocurrency is cryptographic, which means that it uses a special encryption that allows controlling the generation of coins and confirming the transaction. While conventional financial systems use physical objects, cryptocurrency is completely electronic. In fact, it does not require any physical objects, as digital money can be stored in special wallets and then transmitted electronically to other individuals’ wallets through financial transactions. This is the main distinction between cryptocurrency and other financial systems.