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Published on November 20th, 2014 | by admin

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What Is A Bitcoin?

Since 2009 the Bitcoin has been an alternative currency for individuals or businesses to use instead of more traditional ways of making transactions.  It enables users to make and receive payments on a global scale, usually within just a few minutes. Bitcoins are a de-centralised, digital currency meaning no single institution controls them.

Growing popularity

We learn that there are currently more than 13 million Bitcoins in circulation and this figure is increasing all the time, yet there is still considerable mystery surrounding them. When we say there are millions of Bitcoins in circulation, we mean electronically – they are not printed like traditional notes and coins.

Getting started

It is relatively straight forward to install a Bitcoin wallet onto a computer or mobile phone. This will generate a Bitcoin address and a private key that enable transactions to be made.

A Bitcoin transaction

All transactions made using Bitcoins are recorded within a giant public ledger which is referred to as the Blockchain. Bitcoins are sent in a transaction from one user to another via a Bitcoin address and a private key. It is also feasible to attach financial contracts to the Blockchain. Business owners using Bitcoins can then convert them into home currencies once payment has been received.

Storing private keys

It is essential to keep hold of the private keys which provide access to the transaction data stored in a Bitcoin address. Bitcoin wallets are used to store Bitcoins and come in four types: desktop, mobile, web and hardware forms.

Discussions about Bitcoins became more pronounced following news of an unfortunate user who lost 7,500 Bitcoins worth $7.5 million when he discarded a hard drive containing his private key in a landfill site. It is important to be mindful of malware which can steal Bitcoins from an unsuspecting user too.

Allowing instantaneous transactions anywhere in the world and with low transaction fees, the popularity of Bitcoins seems only likely to increase with more and more merchants using them. But as to whether the Bitcoin will replace everyday currency? Only time will tell.

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patrick.maddison@vowretail.com'



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