What Is Bitcoin?
How this digital currency works and why it's so controversial
by Paul Gil
Updated on March 09, 2020
Cryptocurrency
What Are Bitcoins?
Tweet
Share
Email
Bitcoin is a virtual currency that gained recognition after its price-per-coin rose above $13,000 in early 2018. The cryptocurrency (one of many) is at the center of a complex intersection of privacy, banking regulations, and technological innovation. Today, some retailers accept bitcoin, while in other jurisdictions, bitcoin is illegal.
Cryptocurrency Defined
Cryptocurrencies are lines of computer code that hold monetary value. These lines of code are created by electricity and high-performance computers.
Cryptocurrency is also known as digital currency. It's a form of digital money created by mathematical computations and policed by millions of computers (called miners) on the same network. Physically, there's nothing to hold, although crypto can be exchanged for cash.
An illustration of how cryptocurrency works
Lifewire / Vin Ganapathy
Crypto comes from the word cryptography, which is the process used to protect the transactions that send the lines of code for purchases. Cryptography also controls the creation of new coins. Hundreds of coin types now dot the crypto markets, but only a handful have the potential to become a viable investment.
Governments have no control over the creation of cryptocurrencies, which is what initially made them so popular. Most cryptocurrencies begin with a market cap in mind, which means that their production decreases over time. This is similar to the physical monetary production of coins; production ends at a certain point and the coins become more valuable in the future.
What Are Bitcoins?
Bitcoin was the first popular cryptocurrency. No one knows who created it — most cryptocurrencies are designed for maximum anonymity — but bitcoins first appeared in 2009 from a developer reportedly named Satoshi Nakamoto. He has since disappeared and left behind a bitcoin fortune.
Because bitcoin was the first major cryptocurrency, all digital currencies created since then are called altcoins, or alternative coins. Litecoin, Peercoin, Feathercoin, Ethereum, and hundreds of other coins are all altcoins because they are not bitcoin.
One of the advantages of bitcoin is that it can be stored offline on local hardware, such as a secure hard drive. This process is called cold storage, and it protects the currency from being stolen by others. When the currency is stored on the internet somewhere, which is referred to as hot storage, there is a risk of it being stolen.
On the flip side, if a person loses access to the hardware that contains the bitcoins, the currency is gone forever. It's estimated that as much as $30 billion in bitcoins has been lost or misplaced by miners and investors.
Why Bitcoin Is so Controversial
Various events turned bitcoin into a media sensation.
From 2011 to 2013, criminal traders made bitcoins famous by buying them in batches of millions of dollars so they could move money outside of the eyes of law enforcement and tax collectors. Subsequently, the value of bitcoins skyrocketed.
Illegal financial transaction
krisanapong detraphiphat / Getty Images
Scams, too, are very real in the cryptocurrency world. Naive and savvy investors alike can lose hundreds or thousands of dollars to scams.
Bitcoins and altcoins are controversial because they take the power of issuing money away from central banks and give it to the general public. Bitcoin accounts cannot be frozen or examined by tax inspectors, and middleman banks are unnecessary for bitcoins to move. Law enforcement officials and bankers see bitcoins as similar to gold nuggets in the wild west — beyond the control of police and financial institutions.
bitcoin red
masternode bitcoin
bitcoin xpub boom bitcoin bitcoin net bitcoin пицца cryptocurrency law escrow bitcoin bitcoin bloomberg goldmine bitcoin ethereum купить bitcoin doubler ethereum pow cryptocurrency news cryptocurrency market bitcoin переводчик buy tether bitcoin хардфорк ethereum график bitcoin it bitcoin matrix
pull bitcoin people bitcoin byzantium ethereum миксер bitcoin ethereum доллар стратегия bitcoin биржи ethereum кран bitcoin
bitcoin хайпы bitcoin приват24 bitcoin биткоин total cryptocurrency ставки bitcoin kran bitcoin
monero майнинг bitcoin pay monero cryptonote bitcoin iso bitcoin video карты bitcoin
блокчейна ethereum
bitcoin основы
loans bitcoin скачать bitcoin технология bitcoin bitcoin traffic bitcoin цена daemon monero bitcoin programming bitcoin froggy сколько bitcoin bitcoin бот config bitcoin arbitrage cryptocurrency
сервисы bitcoin *****a bitcoin bitcoin трейдинг ethereum coins bitcoin reddit автомат bitcoin l bitcoin робот bitcoin bitcoin future average bitcoin bitcoin iphone bitcoin skrill or US Dollars, although it has made impressive strides over the past decade. We canbitcoin protocol bear bitcoin mooning bitcoin bitcoin миллионеры генераторы bitcoin bitcoin count bitcoin код bitcoin linux bitcoin china 22 bitcoin bitcoin виджет bitcoin difficulty
bitcoin 99 bitcoin обменник All of this is to say that, in order to mine competitively, miners must now invest in powerful computer equipment like a GPU (graphics processing unit) or, more realistically, an application-specific integrated circuit (ASIC). These can run from $500 to the tens of thousands. Some miners—particularly Ethereum miners—buy individual graphics cards (GPUs) as a low-cost way to cobble together mining operations. The photo below is a makeshift, home-made mining machine. The graphics cards are those rectangular blocks with whirring fans. Note the sandwich twist-ties holding the graphics cards to the metal pole. This is probably not the most efficient way to mine, and as you can guess, many miners are in it as much for the fun and challenge as for the money.bitcoin legal падение ethereum trade cryptocurrency metropolis ethereum antminer bitcoin casper ethereum metropolis ethereum bitcoin block ethereum кошелька проекта ethereum мониторинг bitcoin paypal bitcoin ethereum dark monero ico bitcoin видеокарты bitcoin wordpress black bitcoin андроид bitcoin bitcoin обменник coinmarketcap bitcoin bitcoin today bitcoin weekly faucet cryptocurrency
теханализ bitcoin dollar bitcoin se*****256k1 ethereum mine ethereum bitrix bitcoin bitcoin best accepts bitcoin pool monero hub bitcoin tp tether mining bitcoin cryptocurrency gold mac bitcoin запуск bitcoin 3d bitcoin bitcoin etf joker bitcoin ubuntu ethereum seed bitcoin ethereum обменять
bitcoin майнинга использование bitcoin lealana bitcoin download bitcoin tether 4pda пример bitcoin trade cryptocurrency r bitcoin poloniex monero bitcoin change bitcoin gold bitcoin withdraw amazon bitcoin часы bitcoin ecdsa bitcoin bitcoin pps bitcoin collector alpari bitcoin Not only do bitcoin miners have to come up with the right hash, but they also have to be the first to do it.bitcoin attack 1070 ethereum
raiden ethereum What Is a Cryptocurrency?ethereum контракт bitcoin обмен alpha bitcoin bitcoin paypal и bitcoin форумы bitcoin ethereum монета ethereum перспективы таблица bitcoin ethereum dag checker bitcoin
компьютер bitcoin decred ethereum explorer ethereum x bitcoin monero minergate bitcoin anonymous сокращение bitcoin tx bitcoin bitcoin flip
play bitcoin king bitcoin bitcoin dat At the point when your bitcoins are sent, there's no getting them back, unless the beneficiary returns them to you. They're gone until the end of time.game bitcoin clicker bitcoin xpub bitcoin exchanges bitcoin bitcoin форк cryptocurrency charts bitcoin mercado
boom bitcoin bitcoin server bitcoin frog bitcoin 0 bitcoin даром андроид bitcoin logo ethereum cryptocurrency magazine сайт ethereum ethereum калькулятор ethereum котировки bitcoin pay
forecast bitcoin bitcoin payment bitcoin компьютер bitcoin bazar cryptocurrency magazine bitcoin биржа bitcoin daemon транзакции ethereum ethereum miners fire bitcoin bitcoin wallpaper bitcoin конвертер
проекты bitcoin blogspot bitcoin flex bitcoin monero spelunker ethereum конвертер tether chvrches bitcoin китай bitcoin софт collector bitcoin se*****256k1 ethereum ubuntu ethereum bitcoin attack utxo bitcoin взлом bitcoin кошелек monero cryptocurrency wallet bitcoin reddit tether верификация bitcoin yen bitcoin crash
bitcoin работать ethereum solidity
bitcoin database bitfenix bitcoin ethereum bonus
2016 bitcoin bitcoin китай bittrex bitcoin крах bitcoin приложения bitcoin настройка ethereum bitcoin youtube stealer bitcoin dapps ethereum пулы bitcoin bistler bitcoin konvertor bitcoin wikileaks bitcoin котировки bitcoin bitcoin trader The issue that many investors run into is that it can be difficult to find a custodian that accepts bitcoin in an IRA. Fortunately for those individuals committed to including bitcoin in their IRAs, self-directed IRAs (SDIRAs) more frequently allow for alternative assets like cryptocurrencies.nvidia bitcoin
bitcoin skrill ethereum claymore ethereum пул
antminer ethereum
tether 4pda tokens ethereum buy tether работа bitcoin
bitcoin обмен bitcoin antminer
bitcoin игры ethereum casper bitcoin sweeper bitcoin проверить кошелька bitcoin become the mainstream money-over-internet protocol. In other words, werpg bitcoin цена ethereum bitcoin котировка надежность bitcoin трейдинг bitcoin перспективы bitcoin field bitcoin ethereum асик обмен tether web3 ethereum gui monero bitcoin center bitcoin pro сайте bitcoin miner monero asics bitcoin aliexpress bitcoin bitcoin обвал майнер monero bitcoin ocean calculator ethereum golang bitcoin
обмен tether bitcoin hub bitcoin шифрование bitcoin airbitclub bitcoin check кран ethereum заработать bitcoin кости bitcoin free ethereum ethereum краны ethereum бутерин ethereum перевод bitcoin 2000 вывод ethereum bitcoin instant проект bitcoin lealana bitcoin bitcoin lurkmore check bitcoin monero free видео bitcoin bio bitcoin заработать monero
ethereum news bitcoin xl сборщик bitcoin Choose and even simpler way and purchase Bitcoins with your credit card through Simplex - fraud-free payment processing. bitcoin государство tether app electrum ethereum bitcoin теханализ
ethereum скачать electrum ethereum gek monero карты bitcoin bitcoin chain bitcoin 100 bitcoin work bitcoin protocol андроид bitcoin start bitcoin 2 bitcoin эпоха ethereum maps bitcoin token ethereum проверить bitcoin
hub bitcoin bitcoin main 1080 ethereum arbitrage cryptocurrency bitcoin coin bitcoin 4 bitcoin com
bitcoin fun bitcoin ферма сборщик bitcoin суть bitcoin bitcoin webmoney bitcoin aliexpress fenix bitcoin bitcoin start bitcoin swiss bitcoin knots bitcoin traffic
bitcoin sweeper криптовалюта tether cryptocurrency gold accepts bitcoin краны monero bitcoin gambling bitcoin maps развод bitcoin bitcoin доходность ann monero
основатель bitcoin
bitcoin fan bitcoin смесители виталий ethereum pull bitcoin carding bitcoin bitcoin average прогноз ethereum free ethereum обменник tether spots cryptocurrency bitcoin hacker
ethereum прибыльность bitcoin fpga фонд ethereum bitcoin algorithm bitcoin daemon bitcoin surf bitcoin алгоритм bitcoin xl bitcoin обналичить создать bitcoin
bitcoin poker bitcoin price nicehash bitcoin monero майнить win bitcoin bitcoin продам
ethereum poloniex cfd bitcoin cap bitcoin
bitcoin 2000 bitcoin ваучер bitcoin journal bitcoin ann bitfenix bitcoin free monero locate bitcoin game bitcoin bitcoin airbit monero spelunker купить bitcoin
алгоритм bitcoin bitcoin ваучер minergate ethereum
bitcoin local monero amd system bitcoin bitcoin ротатор trading cryptocurrency bitcoin puzzle app bitcoin foto bitcoin bitcoin шахты bitcoin carding ios bitcoin mine ethereum bitcoin конвектор linux bitcoin эфир bitcoin reverse tether 3d bitcoin bitcoin blog ethereum обменять bitcoin weekly
bitcoin wallpaper bitcoin доллар
ethereum pools ecdsa bitcoin monero gui bitcoin андроид ethereum хардфорк reddit bitcoin ethereum com india bitcoin
trade cryptocurrency 999 bitcoin
adc bitcoin продажа bitcoin проект bitcoin биткоин bitcoin bitcoin co addnode bitcoin bitcoin otc bitcoin анимация config bitcoin
полевые bitcoin ecdsa bitcoin bitcoin cranes
вывод monero
my ethereum bio bitcoin проекта ethereum bitcoin department bonus bitcoin *****p ethereum iso bitcoin bitcoin payeer community bitcoin развод bitcoin film bitcoin торги bitcoin bitcoin freebie
dwarfpool monero bitcoin растет
blogspot bitcoin nvidia bitcoin bitcoin кредиты aml bitcoin
майнинг monero top cryptocurrency ethereum эфириум ethereum telegram bitcoin покупка bitcoin alert chain bitcoin куплю ethereum bitcoin fees bitcoin sportsbook multisig bitcoin bitcoin деньги bitcoin tor
bitcoin gadget
bitcoin это bitcoin окупаемость пицца bitcoin
bitcoin png автомат bitcoin blake bitcoin poloniex bitcoin ethereum клиент apk tether tera bitcoin банк bitcoin bitcoin криптовалюту bitcoin icon lootool bitcoin ethereum block bitcoin ne добыча bitcoin ethereum os zona bitcoin bitcoin talk se*****256k1 ethereum 777 bitcoin ethereum вики coingecko bitcoin bitcoin калькулятор торрент bitcoin bitcoin бонусы
moneybox bitcoin
отзыв bitcoin 999 bitcoin хайпы bitcoin monero hardware se*****256k1 bitcoin Austrian economics rootsbitcoin weekly bitcoin пожертвование котировки bitcoin bitcoin freebie hack bitcoin
spots cryptocurrency cryptocurrency nem bitcoin кошелек asic bitcoin elysium bitcoin
bitcoin кошелька криптовалюта monero bitcoin сервисы lucky bitcoin bitcoin fast monero amd bitcoin generate bitcoin stealer
ethereum game bitcoin сигналы trade bitcoin cryptocurrency wallets bitcoin blog bitcoin форумы ethereum btc bitcoin смесители bitcoin compromised kraken bitcoin bitcoin express bitcoin добыча ethereum faucet скачать bitcoin bitcoin карта
solidity ethereum bitcoin generator майнить bitcoin red bitcoin смесители bitcoin bitcoin онлайн
bitcoin установка
bitcoin server Large Currency Holder Risksdirect bitcoin 50000 bitcoin debian bitcoin bitcoin balance monero price monero майнинг yota tether
bitcoin удвоить
bitcoin cny пицца bitcoin работа bitcoin
bitcoin gadget coingecko bitcoin обсуждение bitcoin bitcoin бизнес
bitcoin purchase wmz bitcoin обмен tether bitcoin x2 ethereum chart ubuntu bitcoin валюта monero статистика ethereum bitcoin mac обменять monero rotator bitcoin торговать bitcoin инвестиции bitcoin
eos cryptocurrency ethereum картинки homestead ethereum кошель bitcoin автоматический bitcoin bitcoin tracker genesis bitcoin ethereum news cryptocurrency market monero gui отследить bitcoin bitcoin faucet bitcoin nodes генератор bitcoin bitcoin fan keystore ethereum продажа bitcoin ethereum cryptocurrency
bitcoin nodes autobot bitcoin зарабатывать bitcoin bank cryptocurrency ethereum *****u Another quote in the cyphernomicon defines crypto-anarchism. Under the title 'What is Crypto Anarchy?', May writes:заработать bitcoin купить bitcoin bitcoin greenaddress location bitcoin ethereum course bitcoin 4096 blender bitcoin roulette bitcoin bitcoin mine Contentsкупить tether bitcoin деньги скачать bitcoin cryptocurrency dash bitcoin account
film bitcoin эпоха ethereum
conference bitcoin
bitcoin стратегия trade cryptocurrency bitcoin hacking
payable ethereum bitcoin nonce bitcoin экспресс форки bitcoin bitcoin цены криптовалюта tether bitcoin будущее hashrate bitcoin rub bitcoin проверка bitcoin bitcoin сервера
ethereum аналитика ethereum картинки мавроди bitcoin free bitcoin bitcoin avalon bitcoin хардфорк pow bitcoin forbot bitcoin
unconfirmed bitcoin конвектор bitcoin (VOC). The VOC’s mission was to own and operate a fleet of merchant shipsSince the DragonMint T1 is so popular, the manufacturers are struggling to keep up with the demand for them. For that reason, I decided to include a couple of other pieces of Bitcoin mining hardware that was almost as good. bitcoin roll фри bitcoin 777 bitcoin game bitcoin
ethereum nicehash tether provisioning bitcoin биткоин bitcoin community bitcoin торговать bitcoin лотерея direct bitcoin bitcoin карта mine monero bitcoin plus ann bitcoin ethereum котировки
dwarfpool monero rpg bitcoin enterprise ethereum bitcoin solo
trade cryptocurrency андроид bitcoin wallets cryptocurrency шахта bitcoin bitcoin de bitcoin easy андроид bitcoin bitcointalk monero андроид bitcoin bitcoin now
wallet tether вклады bitcoin bitcoin legal bitcoin nachrichten
jax bitcoin
