Bitcoin is an electronic currency that has become increasingly popular since its introduction in 2008.Transactions in the bitcoin system are stored in a public transaction ledger (‘the blockchain’),Bitcoin cryptocurrency system enables users to transact securely and pseudo-anonymously by using an arbitrary number of aliases (Bitcoin addresses).
people have been using currencies for thousands of years. Initially, currencies were minted directly from precious metals such as gold and silver.Later on, paper money was introduced and the face value of cash was decoupled from its nominal value, but currencies were still backed up by gold depositories.Nowadays, fiat currencies are allowed to float freely, only backed up by the faith and credit of the states that issue them .Bitcoin is a decentralized system that attempts to over-come the weaknesses of fiat and gold-based currencies.It is not governed by central authorities, such as governments or central banks, and intermediaries for currency issuance or settlement and validation of transactions, and can provide lower transaction fees for payments. The Bitcoin Foundation provides some centralized governance for standardization, protection and promotion of bitcoin, but it does not act as a central bank and does not issue currency
Bitcoin was introduced in 2008 by Satoshi Nakamoto ,which is a pseudonym of an author or group of authors whose identity is covered in mysteries.
The term ‘Bitcoin ’often refers to the system, while the term ‘bitcoin’ or BTC refers to the unit of currency. In this paper, for simplicity we just use the term bitcoin. Bitcoin is an electronic, virtual currency that has no physical representation such as coins or banknotes. The bitcoin eco systemis a network of users that communicate with each other using the bitcoin protocol via the Internet. The bit coin protocol is available as an open source software application and allows users to store and transfer bitcoins for purchasing and selling goods, or to exchange bitcoins for other currencies. The issuance of bitcoins takes places inthe network while handling transactions in a process called bitcoin mining. The bitcoin network started in 2009 and ever since bitcoin has been the most popular decentralized currency. In January 2017 there were16 million bitcoins in circulation with a total value of roughly 16 billion US dollars, although the exchange rate of bitcoins has shown very large fluctuations.
References:
Vranken, H., 2017. Sustainability of bitcoin and blockchains. Current opinion in environmental sustainability, 28, pp.1-9.
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