What is Bitcoin? How does it work? Where do you buy it?

In the mouth of all, Bitcoin, the currency of the Internet, monopolizes praise, criticism and suspicion in equal parts. With numerous advantages over traditional payment systems, Bitcoin presents, like any self-respecting currency, a somewhat dark side that caused, for example, Thailand has banned Bitcoin transactions within its territory. A first step is expected to give other nations.

But first we need to answer some questions, which will be the reason why you come to this article: What is Bitcoin? how does it work? Is it legal? We answer, simply, to these and many other questions about Bitcoin, the currency of the Internet.

What is the origin of Bitcoin?

Bitcoin has its origin in 2009 when Satoshi Nakamoto, pseudonym of one or more persons, decided to launch a new electronic currency whose peculiarity is that only served to perform operations within the network of networks. Bitcoin refers to both the currency and the protocol and the P2P network on which it rests.

So what is Bitcoin?

Bitcoin is a virtual and intangible currency. That is, you can not play in any of its forms as with coins or bills, but can be used as payment in the same way as these.

As happens with the money we have in our bank the Bitcoin increase or decrease our personal account as we make income or expense, the only difference is that there is no possibility of monetizing, as when, for example, withdraw money from a ATM.

What are the peculiarities that make it different from Bitcoin?

Undoubtedly what makes it different from Bitcoin over traditional coins and other virtual means of payment as Ama zon Coins, is decentralization. Or what is the same, Bitcoin is beyond the control of any government, institution or financial institution, whether state or private type, such as the euro, controlled by the European Central Bank or the dollar by the Federal Reserve USA.

In Bitcoin control is performed, indirectly through their transactions, users themselves through exchanges P2 P (Peer to Peer or Point to Point). This P2P structure and the lack of control makes it impossible for any authority to manipulate their value or cause inflation producing more.

In fact, production and value is based on the law of supply and demand. Another interesting detail is that Bitcoin has set a limit of 21 million coins, which will be reached in 2030.

How much is a Bitcoin?

As we have indicated the value of Bitcoin is based on supply and demand, and is calculated using an algorithm that measures the amount of movement and Bitcoin transactions in real time.

Currently the price of Bitcoin stands, euro up or down, around 475 euros (to February 13, 2014), although this value is far less stable since Bitcoin is ranked as the most unstable currency forex market .

For example, analyzing the period between August 2012 and August 2013, it reached a peak value of 134 euros in April 2013 although early February its value was around only 16 euros.

In fact, its value has increased 600% in the first three months of 2013. Details by which many experts think that this is a tremendous bubble filled with speculators who, sooner or later, will eventually explode.


Source: bitcoin.de

Here are some updated tables, the first shows the historical evolution of Bitcoin, from its inception until this year 2014. As you can see, its value has increased exponentially. The second shows the evolution from early 2014 until mid-February.

bitcoin historical evolution
bitcoin evolution in 2014
Bitcoin has risen so much that has come to take the case of an American who spent $ 27 in 2009, he forgot them, and when it was agreed four years later, had this absurd, so bulky, amount of money.

How do they work?

Bitcoin to operate only have to download any of the available applications, there are multiple alternatives to any operating system, either desktop or mobile as iOS or Android (or multibit Bitcoin Wallet, are just a few options).

With them you can create your purse Bitcoins that simplifying, consists of a private key associated with a public key with which to perform operations. Thanks to them, the Bitcoin can not be forged and ensure that user to user transactions are conducted safely.

Bitcoin Wallet
How to get Bitcoin?

There are three ways to get or buy Bitcoins. The first, and simplest, is accessing any of the markets Bitcoin as MtGox or Bitcoin.com that allow conventional money exchange, euros or dollars for Bitcoin.

Another way is the exchange of goods with other users, ie the purchase / sale of life but paying with Bitcoins. The last, and strangest, is the "mining". This practice is to use part of the resources of our computer in solving extremely complex in exchange for Bitcoins mathematical problems.

Currently about 25,000 people perform this task and about 25 Bitcoins are generated every 10 minutes, so this practice to get virtual currency is becoming more complicated, unless you belong to one of the colonies of miners circulating on the network.

Is it legal Bitcoin?

The legality of Bitcoin is simple to summarize "Bitcoin is legal in that place which accept as payment in a transaction", so easy and simple. Being out of control of any institution there is a legal vacuum on it.

Moreover, being anonymous and encrypted transactions between two users, they are free of any commission or tax such as VAT.

What is the dark side of Bitcoin?

Decentralization and anonymity, have made Bitcoin in the preferred fraudulent transactions such as the sale of drugs or money laundering payment. It is also the means of "official" pay lowlife Internet.

This has made government institutions Brigade US economic crimes (FinCEN) have stopped making "blind eye" and want to implement regulatory measures for operations with Bitcoins.



Wordpress
But not all not all uses are alegal. Wordpress, for example, can pay in store with Bitcoins and it seems that the first ATMs that work with this virtual currency are very close.