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Bitcoin is a form of digital currency, created and held electronically. Bitcoins aren’t controlled or printed, like dollars or Euros – they’re produced by people running computers all around the world, using software that solves mathematical problems. The first example of its kind, this crypto money is no different from our conventional money system and you can nearly buy anything from it. The only difference is that it is decentralized i.e. no single institution controls the Bitcoin network- putting some people at ease.

The basic question which arises here is, how does this system work in real life? The answer is quite simple. Conventional currency has been based on gold or silver. Theoretically, we know that if you hand over a dollar at the bank, we can get some gold back, but this virtual money isn’t based on gold; it’s based on mathematics. Around the world, people are using software programs that follow a mathematical formula to produce Bitcoins. The mathematical formula is freely available so that anyone can check it. The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to. So, does it mean that we can download as much Bitcoin as much we want and use them? No. Actually, the Bitcoin protocol – the rules that make it work – say that only 21 million Bitcoins can ever be created by miners. However, these coins can be divided into smaller parts (the smallest divisible amount is one hundred millionth of a Bitcoin and is called a ‘Satoshi’, after the founder of Bitcoin).

Why use Bitcoins with the security issues in it? Because it’s easy to handle and transfer. And also when it comes to security then Bitcoin protocol has been regarded as one of the safest online transactions in the world. Also, the problem with regular fiat currency is that governments can print as much of it as they like, and they frequently do, which causes the problems of inflation in the market but as the quantity of Bitcoins is limited so there is no risk of inflation in Bitcoin. With the coming of bitcoins, a number of questions can be raised about the future of fiat money. Are bitcoins revolutionary enough to bring a shift in the control of the world of currency? Or is it just a dilapidated start to the modernization of money? We advise a study of the virtual money while you relax and watch the drama of this drift between ideology and technology.

This is just an introduction of bitcoins and doesn’t address any of the controversies going around the matter.


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