The benefits offered are so tempting because the increase in its valuation from time to time is extraordinary. In Indonesia itself, there are already many user bases, and even several companies have been established specifically to become Bitcoin trading platforms (transactions).
What are Bitcoins?
Bitcoin is a new currency or electronic money that was created in 2009 by someone using the pseudonym Satoshi Nakamoto, as reported by Investopedia.com. Bitcoin is mainly used in transactions on the internet without using intermediaries or not using bank services.
Bitcoin uses a peer to peer (P2P) system. However, the system works without a single repository or administrator where the United States Department of the Treasury calls Bitcoin a decentralized currency.
Unlike most other currencies, Bitcoin is not dependent on one major issuer. Bitcoin uses a distributed database and spreads to the nodes of a P2P network to a transaction journal.
Bitcoin History
On August 18, 2008, the Bitcoin.org domain was registered. This domain is already WhoisGuard Protected, which means the user's identity is not public information.
Then on October 31, 2008, Satoshi Nakamoto made the announcement on the Cryptography Mailing List at metzdowd.com.
“I have been working on a new electronic financial system that is completely peer-to-peer, with no third parties,” Magna Carta says of how Bitcoin operates as of today.
On January 03, 2009, the first Block of the Bitcoin blockchain launched could be interpreted as a statement, a hint, or simply as a token. Cryptocurrency users believe that this is a special statement from Satoshi after appearing in the newspaper 'The Times: Chancellor on brink of second bailout for banks' on the same date.
The first version of the Bitcoin software was announced on the Cryptography mailing list on January 8, 2009. And the next day, Block 1 was mined, and Bitcoin mining had already started.
How does it work?
As a new user, the first thing is to install a Bitcoin wallet on your computer or mobile. This step will automatically create the first Bitcoin address. Just like email, we can share Bitcoin addresses with other people, so they can pay or vice versa. However, Bitcoin addresses should only be used once.
The blockchain is a public transaction record on which the Bitcoin network rests. All confirmed transactions are stored in the blockchain. In this way, Bitcoin wallets can calculate the remaining spendable money and new transactions can be verified to ensure that they are actually owned by the user.
Private Keys, a value transfer transaction between Bitcoin wallets that are entered into the blockchain. Bitcoin wallets store a secret piece of data called a private key or seed, which is used to sign transactions, providing mathematical proof that it really comes from the wallet owner.
Mining is a system used to confirm queues of transactions by inserting them into the block-chain. This process confirms the chronological order of the block-chain, protects network neutrality, and allows other computers to agree on the state of the system. In order to be confirmed, transactions must be chained in a block that complies with strict cryptographic rules and will be verified by the network.
Mining is also like a competitive lottery in that it prevents each individual from easily adding successive new blocks to the block-chain.
How to Buy Bitcoin
There are many proponents who believe that Bitcoin is the digital currency of the future. Although not backed by any government or central bank, Bitcoins can be exchanged for traditional currencies. But in reality, the exchange rate of Bitcoin against the dollar attracts potential investors who are interested in investing in the currency.
In March 2014, the IRS stated that all virtual currencies, including Bitcoin, would be taxed as property, not currency. Profits or losses from Bitcoins stored as capital will be realized as capital gains/losses, while Bitcoins held as inventory will be calculated as ordinary profit/loss.
Like any investment, the principle of buy low and sell high applies to Bitcoin. The most ancient way to collect currency is by buying on a Bitcoin exchange, but there are other ways to earn and own Bitcoin as well.
How about you, business friends interested in investing in Bitcoin?
