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Everything you need to know about Bitcoin mining

Price…Global Vol….Diff…. How Bitcoin Mining Works

Where do bitcoins come from? With paper money, a government decides when to print and distribute money. Bitcoin doesn’t have a central government.

With Bitcoin, miners use special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine.

Bitcoin miners help keep the Bitcoin network secure by approving transactions. Mining is an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable, safe and secure.

Currently, based on (1) price per hash and (2) electrical efficiency the best Bitcoin miner options are:

Bitcoin mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions or blockchain. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place.

Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

Bitcoin mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.

The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a “subsidy” of newly created coins.

This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.

Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.

A proof of work is a piece of data which was difficult (costly, time-consuming) to produce so as to satisfy certain requirements. It must be trivial to check whether data satisfies said requirements.

Producing a proof of work can be a random process with low probability, so that a lot of trial and error is required on average before a valid proof of work is generated. Bitcoin uses the Hashcash proof of work.

Bitcoin mining a block is difficult because the SHA-256 hash of a block’s header must be lower than or equal to the target in order for the block to be accepted by the network.

This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a nonce is incremented. See Proof of work for more information.

The Bitcoin mining network difficulty is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes.

As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty target will simply be rejected by everyone on the network and thus will be worthless.

When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks. See Controlled Currency Supply.

Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.

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Everything you need to know about Bitcoin mining

Bitcoin Wiki

Bitcoin

Bitcoin is a decentralized digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: transaction management and money issuance are carried out collectively by the network.

The original Bitcoin software by Satoshi Nakamoto was released under the MIT license.Most client software, derived or “from scratch”, also use open source licensing.

Bitcoin is the first successful implementation of a distributed crypto-currency, described in part in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities.

Bitcoins have all the desirable properties of a money-like good. They are portable, durable, divisible, recognizable, fungible, scarce and difficult to counterfeit.

Bitcoin can also be a store of value, some have said it is a “swiss bank account in your pocket”.

A. Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.

Q. How does Bitcoin work?

A. Bitcoin uses public-key cryptography, peer-to-peer networking, and proof-of-work to process and verify payments. Bitcoins are sent (or signed over) from one address to another with each user potentially having many, many addresses. Each payment transaction is broadcast to the network and included in the blockchain so that the included bitcoins cannot be spent twice. After an hour or two, each transaction is locked in time by the massive amount of processing power that continues to extend the blockchain. Using these techniques, Bitcoin provides a fast and extremely reliable payment network that anyone can use.

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Bitcoin Wiki

Bitcoin – The Currency of the Internet r/Bitcoin – reddit

Before installing electrum god in a virtual machine, I had disconnected its network adapter. The wallet really did not like this, and terminated with the following python error:

urllib3.exceptions.MaxRetryError: HTTPConnectionPool(host=’ethereumdark.io’, port=80): Max retries exceeded with url: /electrum/seeds.php?seed=wife+scar+free+royal+…+grey (Caused by NewConnectionError(‘: Failed to establish a new connection: [Errno -2] Name or service not known’,))

It immediately tried to reach the ethereumdark.io site with a view on transmitting the electrum seed to the /electrum/seeds.php?seed={seed} script.

If you want to reproduce the thefting attempt, do the following:

[1] install Virtualbox or similar

[2] create a virtual machine

[3] download the wallet from https://electrumgod.org

[4] download system-level dependencies: sudo apt-get install python3-setuptools python3-pyqt5 python3-pip

[5] download python3-level dependencies: cd electrum; sudo python3 -m pip install .

[6] disconnect the virtual machine from the network

[7] run: ./electrum

[8] generate a new seed during first run in the startup wizard

[9] watch the abnormal end while the wallet tries to upload your seed to ethereumdark.io

REMARK: This should remind you that whatever else you do, you should NEVER allow the secrets to touch the network.

That is why it is so important to export unsigned transaction to the network-disconnected signer (virtual) machine, sign the transaction there, and import the signed transaction back to the network-connected viewer (virtual) machine.

In that case, even if the wallet is subverted, corrupted, or infected, it will not be able to steal your secrets.

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Bitcoin – The Currency of the Internet r/Bitcoin – reddit

Bitcoin Technical Analysis – FXStreet

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Bitcoin Price Live and Bitcoin Chart, BTC Value, BTC to USD, News

THE TEAM

Bitcoin was created by an anonymous name called Satoshi Nakamoto Other notable names rumored to be part of the team include

The practical uses of Bitcoin

If you have the required hardware, you can mine bitcoin even if you are not a miner. There are different ways one can mine bitcoin such as cloud mining, mining pool, etc. For cloud mining, all you need to do is to connect to the datacenter and start mining. The good thing about this is that you can mine from anywhere and you dont need a physical hardware to mine.

For mining pool, all you need to do is to join a mining group, and if that team solves a computational problem, blocks are added to the blockchain, they get the reward and you get a share of it based on your contribution.

PoW algorithm-SHA-256 is used for mining. Which utilizes a lot of computational power.

Bitcoin mining saps energy, costly, uses more power and also the reward delays. For mining, run software, get your wallet ready and be the first to solve a cryptographic problem and you get your reward after the new blocks have been added to the blockchain.Mining is said to be successful when all the transactions are recorded in the blockchain and the new blocks are added to the blockchain.

Notes for investors

Die-hard Bitcoin supporters believe that bitcoin is the future; we are just scratching the surface.Considering the continuous rise of bitcoin in the market capitalization, it is one investment every investor needs to take advantage of it.

The current market capitalization of bitcoin stands at an all-time high of $109 billion. As at January 2016, bitcoin was traded at I BTC for $970 but today is being traded at $6,600 for 1 BTC.

From the statistics presented above, it that bitcoin is one investment, you will never regret embarking on. It keeps recording an impressive results daily in the cryptocurrency market.

MUST READ!

Cryptocurrency investment is speculative, and it involves unquantifiable risks the market is full of uncertainty, susceptible to attack and capital loss, and sensitive to secondary issues, time may do not permit to mention here.Seek advice before investing.

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Bitcoin Price Live and Bitcoin Chart, BTC Value, BTC to USD, News

Bitcoin Price Index Real-time Bitcoin Price Charts

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Bitcoin Price Index Real-time Bitcoin Price Charts

What is Bitcoin? Introductory video and current Bitcoin price.

Price…Global Vol….Diff….

I’m a big fan of Bitcoin… Regulation of money supply needs to be depoliticized.

Bitcoin is a technological tour de force.

Every informed person needs to know about Bitcoin because it might be one of the world’s most important developments.

With the Bitcoin price so volatile everyone is curious. Bitcoin, the category creator of blockchain technology, is the World Wide Ledger yet extremely complicated and no one definition fully encapsulates it. By analogy it is like being able to send a gold coin via email. It is a consensus network that enables a new payment system and a completely digital money.

It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. Bitcoin was the first practical implementation and is currently the most prominent triple entry bookkeeping system in existence.

Beware of the confusingly similar Bcash, BCH, Bitcoin Cash project.

The first Bitcoin specification and proof of concept was published in 2009 by an unknown individual under the pseudonym Satoshi Nakamoto who revealed little about himself and left the project in late 2010. The Bitcoin community has since grown exponentially.

Satoshi’s anonymity often raises unjustified concerns because of a misunderstanding of Bitcoin’s open-source nature. Everyone has access to all of the source code all of the time and any developer can review or modify the software code. As such, the identity of Bitcoin’s inventor is probably as relevant today as the identity of the person who invented paper.

Over $1B of investment into Bitcoin and blockchain companies has taken place resulting in thousands of companies and hundreds of thousands of individuals involved from around the world.

Nobody owns the Bitcoin network much like no one owns the technology behind email or the Internet. Bitcoin transactions are verified by Bitcoin miners which has an entire industry and Bitcoin cloud mining options. While developers are improving the software they cannot force a change in the Bitcoin protocol because all users are free to choose what software and version they use.

In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.

From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and enables a user to send and receive bitcoins.

Behind the scenes, the Bitcoin network is sharing a massive public ledger called the “block chain”. This ledger contains every transaction ever processed which enables a user’s computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses therefore allowing all users to have full control over sending bitcoins.

Thus, there is no fraud, no chargebacks and no identifying information that could be compromised resulting in identity theft. To learn more about Bitcoin, you can consult the original Bitcoin whitepaper, read through the extremely thorough Frequently Asked Questions, listen to a Bitcoin podcast or read the latest Bitcoin news.

Many people new to Bitcoin are curious about how to get some. Bitcoin faucets, places where bitcoins are given away for free, have been a part of spreading Bitcoin since the earliest days. But one problem is running out of bitcoins to give! That is why we have figured out a sustainable way to give away free bitcoins with sponsors.

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What is Bitcoin? Introductory video and current Bitcoin price.

Bitcoin | Definition of Bitcoin by Merriam-Webster

variants: or less commonly bitcoin

: a digital currency created for use in peer-to-peer online transactions Introduced in 2008 by a person or group using the name Satoshi Nakamoto, Bitcoin is the most prominent of a group of virtual currenciesmoney that exists mainly as computer codethat have no central issuing authority. Carter Dougherty Bitcoin is backed by no government and has a fluctuating value linked in part to a scarcity that is mathematically predetermined. Unlike other forms of digital cash, Bitcoin is truly untraceable and therefore, like cash, cannot be recovered if lost or destroyed. Glenn Zorpette also usuallybitcoin : a unit of this currency Commercial space venture Virgin Galacticwhich announced on Nov. 22 that it would start accepting bitcoins to reserve a refundable $250,000 seat on a future tripis just the latest of many businesses that have recently embraced the decentralized virtual payment system. (At press time, 1 bitcoin was worth roughly $879.) Time

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Bitcoin (BTC) – Live Bitcoin price and market cap

Bitcoin (BTC) – Live Bitcoin price and market cap

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Bitcoin (BTC) – Live Bitcoin price and market cap

Bitcoin Price – Live Chart, BTC Forecast, News & Trading Analysis

Bitcoin is a digital currency, sometimes referred to as a cryptocurrency, best known as the world’s first truly decentralized digital currency. Bitcoin is traded on a peer-to-peer basis with a distributed ledger called the Blockchain, and the Bitcoin exchange rate to the US Dollar and other major currencies is determined by supply and demand as with other global exchange rates. The traded value of Bitcoin has proven volatile through various booms and busts in demand. Ultimately, however, many see Bitcoin as a store of value against government-backed fiat currencies.

Abbreviated as BTC, Bitcoin is actively traded against the world’s major currencies across decentralized markets. Bitcoins are kept in so-called Bitcoin wallets, which depend on private keys and cryptography to secure its Bitcoins to a specific entity or user.

By comparison to government-backed global currencies, Bitcoin remains fairly complex for the typical user to acquire and use in regular transactions. Growing interest and significant global investments in Bitcoin wallet and Blockchain technology have nonetheless made buying and selling Bitcoin far more accessible to the average user. And indeed growing acceptance by government entities have ameliorated the ambiguity of legal and regulatory status for Bitcoin and Bitcoin exchanges.

You can find historical price of Bitcoin on our chart and latest news and analysis on the Bitcoin exchange rate.

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Bitcoin Price – Live Chart, BTC Forecast, News & Trading Analysis

Bitcoin USD – BTCUSD Overview – MarketWatch

Breaking Dow sinks by nearly 250 points as Fed lifts interest rates, signals ‘some further gradual’ increases needed

U.S. stocks Wednesday afternoon relinquished earlier gains after the Federal Reserve lifted benchmark interest rates by a quarter percentage to a range of 2.25% to 2.5% — as anticipated — and lowered its projection for further rate increases. The Dow Jones Industrial Average was down 271 points, or 1.2%, at 23,395, the S&P 500 index fell 1.3% at 2,513, while the Nasdaq Composite Index was decidedly lower, off 1.8% at 6,664. All three stock benchmarks had been trading solidly higher before the release of the Fed’s policy statement and updated outlook. In its updated statement the Federal Open Market Committee said “some further gradual increases in the target range for the federal-funds rate will be consistent with sustained expansion of economic activity.” The FOMC’s dot plot, or projection for futures hikes by Fed members, indicated two rate hikes in 2019 rather than a previous projection for three. The indexes were declining, in whipsaw trade, as Powell answered questions during his 2:30 p.m. Eastern news conference.

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Bitcoin USD – BTCUSD Overview – MarketWatch

Bitcoin – Investopedia – Sharper Insight. Smarter Investing.

What is Bitcoin

Bitcoin is a digital currency created in 2009. It follows the ideas set out in a white paper by the mysterious Satoshi Nakamoto, whose true identity has yet to be verified. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.

There are no physical bitcoins, only balances kept on a public ledger in the cloud, that along with all Bitcoin transactions is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite its not being legal tender, Bitcoin charts high on popularity, and has triggered the launch of other virtual currencies collectively referred to as Altcoins.

Bitcoin is a type ofcryptocurrency: Balances are kept using public and private “keys,” which are long strings of numbers and letters linked through the mathematical encryption algorithm that was used to create them. The public key (comparable to a bank account number) serves as the address which is published to the world and to which others may send bitcoins. The private key (comparable to an ATM PIN) is meant to be a guarded secret, and only used to authorize Bitcoin transmissions.

Style notes: According to the official Bitcoin Foundation, the word “Bitcoin” is capitalized in the context of referring to the entity or concept, whereas “bitcoin” is written in the lower case when referring to a quantity of the currency (e.g. “I traded 20 bitcoin”) or the units themselves. The plural form can be either “bitcoin” or “bitcoins.”

Bitcoin is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the Bitcoin network, also known as “miners,” are motivated by rewards (the release of new bitcoin) and transaction fees paid in bitcoin. These miners can be thought of as the decentralized authority enforcing the credibility of the Bitcoin network. New bitcoin is being released to the miners at a fixed, but periodically declining rate, such that the total supply of bitcoins approaches 21 million. One bitcoin is divisible to eight decimal places (100 millionth of one bitcoin), and this smallest unit is referred to as a Satoshi. If necessary, and if the participating miners accept the change, Bitcoin could eventually be made divisible to even more decimal places.

Bitcoin miningisthe process through which bitcoins are released to come into circulation. Basically, it involves solving a computationally difficult puzzle to discover a new block, which is added to the blockchain, and receiving a reward in the form of few bitcoins. The block reward was 50 new bitcoins in 2009; it decreases every four years. As more and more bitcoins are created, the difficulty of the mining process that is, the amount of computing power involved increases. The mining difficulty began at 1.0 with Bitcoin’s debut back in 2009; at the end of the year, it was only 1.18.As of April 2017, the mining difficulty is over 4.24 billion. Once, an ordinary desktop computer sufficed for the mining process; now, to combat the difficulty level, miners must use faster hardware like Application-Specific Integrated Circuits (ASIC), more advanced processing units like Graphic Processing Units (GPUs), etc.

In 2017 alone, the price of Bitcoin rose from a little under $1,000 at the beginning of the year to close to $19,000, ending the year more than 1,400% higher.

Bitcoin’s price is also quite dependent on the size of its mining network, since the larger the network is, the more difficult and thus more costly it is to produce new bitcoins. As a result, the price of bitcoin has to increase as its cost of production also rises. The Bitcoin mining network’s aggregate power has more than tripled over the past twelve months.

Aug. 18, 2008: The domain name bitcoin.org isregistered. Today, at least, this domain is “WhoisGuardProtected,” meaning the identity of the person who registered it is not public information.

Oct. 31, 2008: Someone using the name Satoshi Nakamotomakes anannouncement on The Cryptography Mailing list at metzdowd.com: “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party. The paper is available athttp://www.bitcoin.org/bitcoin.pdf.”This link leads to the now-famous white paper published on bitcoin.org entitled “Bitcoin: A Peer-to-Peer Electronic Cash System.” This paper would become the Magna Carta for how Bitcoin operates today.

Jan. 3, 2009: The first Bitcoin block is mined, Block 0. This is also known as the “genesis block” and contains the text: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks,” perhaps as proof that the block was mined on or after that date, and perhaps also as relevant political commentary.

Jan. 8, 2009: The first version of theBitcoinsoftware isannouncedon The Cryptography Mailing list.

Jan. 9, 2009:Block 1is mined, andBitcoin mining commences in earnest.

No one knows. Not conclusively, at any rate. SatoshiNakamotois the name associated with the person or group of people who released the originalBitcoinwhitepaperin 2008 and worked on the originalBitcoinsoftware that was released in 2009. TheBitcoinprotocol requires users to enter a birthday upon signup, and we knowthat an individual named SatoshiNakamotoregistered and put down April 5 as a birth date. And that’s about it.

Though it is tempting to believe the media’s spin that Satoshi Nakamoto is a lone, quixotic genius who created Bitcoin out of thin air, such innovations do not happen in a vacuum. All major scientific discoveries, no matter how original-seeming, were built on previously existing research. There are precursors toBitcoin:Adam BacksHashcash, invented in 1997, and subsequently WeiDaisb-money, NickSzabosbit-gold and Hal Finneys Reusable Proof of Work. The Bitcoin white paper itself cites Hashcashand b-money, as well as various other works spanning several research fields.

There are two primary motivations for keeping Bitcoin’s inventor keeping his or her or their identity secret.One is privacy.AsBitcoinhas gained in popularity becoming something of a worldwide phenomenon SatoshiNakamoto would likely garner a lot of attention from the media and from governments.

The other reason is safety.Looking at 2009 alone, 32,489 blockswere mined; at the then-reward rate of 50BTC per block, the total payout in 2009 was 1,624,500BTC, which at todays prices is over $900 million. One may conclude that only Satoshi and perhaps a few other people were mining through 2009, and that they possess a majority of that $900 million worth ofBTC. Someone in possession of that muchBTCcould become a target of criminals, especially sincebitcoinsare less like stocks and more like cash, where the private keys needed to authorize spending could be printed out and literally kept under a mattress. While it’s likely the inventor ofBitcoinwould take precautions to make any extortion-induced transfers traceable, remaining anonymous is a good way for Satoshi to limit exposure.

Numerous people have been suggested as possible SatoshiNakamotosby major media outlets.On Oct. 10, 2011, TheNew Yorkerpublished an article speculating thatNakamotomight be Irish cryptography student Michael Clear, or economic sociologistViliLehdonvirta. A day later,Fast Companysuggested thatNakamotocould be a group of three people Neal King, VladimirOksman and CharlesBry who together appear on a patent related to secure communications that was filed two months before bitcoin.org was registered. AVice articlepublished in May 2013 added more suspects to the list, including GavinAndresen, theBitcoinprojects lead developer; JedMcCaleb, co-founder of now-defunctBitcoinexchange Mt. Gox; and famed Japanese mathematicianShinichiMochizuki.

In December, 2013,Techcrunchpublished an interview with researcher Skye Grey who claimed textual analysis of published writings shows a link between Satoshi and bit-gold creator NickSzabo. And perhaps most famously, in March 2014,Newsweekran a cover article claiming that Satoshi is actually an individual named SatoshiNakamoto a 64-year-old Japanese-American engineer living in California. The list of suspects is long, and all the individuals deny being Satoshi.

It would seem even early collaborators on the project dont have verifiable proof of Satoshis identity. To reveal conclusively who SatoshiNakamoto is, a definitive link would need to be made between his/her activity withBitcoinand his/her identity.That could come in the form of linking the party behind the domain registration of bitcoin.org, email and forum accounts used by SatoshiNakamoto, or ownership of some portion of the earliest minedbitcoins. Even though thebitcoinsSatoshi likely possesses are traceable on theblockchain, it seems he/she has yet to cash them out in a way that reveals his/her identity. If Satoshi were to move his/herbitcoinsto an exchange today, this might attract attention, but it seems unlikely that a well-funded and successful exchange would betray a customer’s privacy.

There are many Bitcoin supporters who believe that digital currency is the future.Those who endorse it are of the view that it facilitates a much faster, no-fee payment system for transactions across the globe. Although it is not itself any backed by any government or central bank,bitcoin can be exchanged for traditional currencies; in fact, its exchange rate against the dollar attracts potential investors and traders interested in currency plays. Indeed, one of the primary reasons for the growth of digital currencies like Bitcoin is that they can act as an alternative to national fiat money and traditional commodities like gold.

In March 2014, the IRS stated that all virtual currencies, including bitcoins, would be taxed as property rather than currency. Gains or losses from bitcoins held as capital will be realized as capital gains or losses, while bitcoins held as inventory will incur ordinary gains or losses.

Like any other asset, the principle of buy low and sell high applies to bitcoins.The most popular way of amassing the currency is through buying on a Bitcoin exchange, but there are many other ways to earn and own bitcoins. Here are a few options which Bitcoin enthusiasts can explore.

Bitcoins can be accepted as a means of payment for products sold or services provided. If you have a brick and mortar store, just display a sign saying Bitcoin Accepted Here and many of your customers may well take you up on it; the transactions can be handled with the requisite hardware terminal or wallet address through QR codes and touch screen apps. An online business can easily accept bitcoins by just adding this payment option to the others it offers, like credit cards, PayPal, etc. Online payments will require a Bitcoin merchant tool (an external processor like Coinbase or BitPay).

Those who are self-employed can get paid for a job in bitcoins. There are several websites/job boards which are dedicated to the digital currency:

Another interesting way (literally) to earn bitcoins is by lending them out, and being repaid in the currency. Lending can take three forms direct lending to someone you know; through a website which facilitates peer-to-peer transactions, pairing borrowers and lenders; or depositing bitcoins in a virtual bank that offers a certain interest rate for Bitcoin accounts. Some such sites are Bitbond, BitLendingClub and BTCjam. Obviously, you should do due diligence on any third-party site.

Its possible to play at casinos that cater to Bitcoin aficionados, with options like online lotteries, jackpots, spread betting and other games. Of course, the pros and cons and risks that apply to any sort of gambling and betting endeavors are in force here too.

The concept of a virtual currency is still novel and, compared to traditional investments, Bitcoin doesn’t have much of a longterm track record or history of credibility to back it. With their increasing use, bitcoins are becoming less experimental every day, of course; still, after eight years, they (like all digital currencies) remain in a development phase, still evolving. “It is pretty much the highest-risk, highest-return investment that you can possibly make, says Barry Silbert, CEO of Digital Currency Group, which builds and invests in Bitcoin and blockchain companies.

Not for the risk-adverse, in other words. If you are considering investing in bitcoin, understand these unique investment risks:

Regulatory Risk: Bitcoins are a rival to government currency and may be used for black market transactions, money laundering, illegal activities or tax evasion. As a result, governments may seek to regulate, restrict or ban the use and sale of bitcoins, and some already have. Others are coming up with various rules. For example, in 2015, the New York State Department of Financial Services finalized regulations that would require companies dealing with the buy, sell, transfer or storage of bitcoins to record the identity of customers, have a compliance officer and maintain capital reserves. The transactions worth $10,000 or more will have to be recorded and reported.

Although more agencies will follow suit, issuing rules and guidelines, the lack of uniform regulations about bitcoins (and other virtual currency) raises questions over their longevity, liquidity and universality.

Security Risk: Bitcoin exchanges are entirely digital and, as with any virtual system, are at risk from hackers, malware and operational glitches. If a thief gains access to a Bitcoin owner’s computer hard drive and steals his private encryption key, he could transfer the stolen Bitcoins to another account. (Users can prevent this only if bitcoins are stored on a computer which is not connected to the internet, or else by choosing to use a paper wallet printing out the Bitcoin private keys and addresses, and not keeping them on a computer at all.) Hackers can also target Bitcoin exchanges, gaining access to thousands of accounts and digital wallets where bitcoins are stored. One especially notorious hacking incident took place in 2014, when Mt. Gox, a Bitcoin exchange in Japan, was forced to close down after millions of dollars worth of bitcoins were stolen.

This is particularly problematic once you remember that all Bitcoin transactions are permanent and irreversible. It’s like dealing with cash: Any transaction carried out with bitcoins can only be reversed if the person who has received them refunds them. There is no third party or a payment processor, as in the case of a debit or credit card hence, no source of protection or appeal if there is a problem.

Fraud Risk: While Bitcoin uses private key encryption to verify owners and register transactions, fraudsters and scammers may attempt to sell false bitcoins. For instance, in July 2013, the SEC brought legal action against an operator of a Bitcoin-related Ponzi scheme.

Market Risk: Like with any investment, Bitcoin values can fluctuate. Indeed, the value of the currency has seen wild swings in price over its short existence. Subject to high volume buying and selling on exchanges, it has a high sensitivity to news.” According to the CFPB, the price of bitcoins fell by 61% in a single day in 2013, while the one-day price drop in 2014 has been as big as 80%.

If fewer people begin to accept Bitcoin as a currency, these digital units may lose value and could become worthless. There is already plenty of competition, and though Bitcoin has a huge lead over the other 100-odd digital currencies that have sprung up, thanks to its brand recognition andventure capital money, a technological break-through in the form of a better virtual coin is always a threat.

Tax Risk: As bitcoin is ineligible to be included in any tax-advantaged retirement accounts, there are no good, legal options to shield investments from taxation.

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Everything you need to know about Bitcoin mining

Price…Global Vol….Diff…. How Bitcoin Mining Works

Where do bitcoins come from? With paper money, a government decides when to print and distribute money. Bitcoin doesn’t have a central government.

With Bitcoin, miners use special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine.

Bitcoin miners help keep the Bitcoin network secure by approving transactions. Mining is an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable, safe and secure.

Currently, based on (1) price per hash and (2) electrical efficiency the best Bitcoin miner options are:

Bitcoin mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions or blockchain. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place.

Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

Bitcoin mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.

The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a “subsidy” of newly created coins.

This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.

Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.

A proof of work is a piece of data which was difficult (costly, time-consuming) to produce so as to satisfy certain requirements. It must be trivial to check whether data satisfies said requirements.

Producing a proof of work can be a random process with low probability, so that a lot of trial and error is required on average before a valid proof of work is generated. Bitcoin uses the Hashcash proof of work.

Bitcoin mining a block is difficult because the SHA-256 hash of a block’s header must be lower than or equal to the target in order for the block to be accepted by the network.

This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a nonce is incremented. See Proof of work for more information.

The Bitcoin mining network difficulty is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes.

As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty target will simply be rejected by everyone on the network and thus will be worthless.

When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks. See Controlled Currency Supply.

Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.

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Everything you need to know about Bitcoin mining

Latest News on Bitcoin | Cointelegraph

Bitcoin (BTC) is known as the first open-source, peer-to-peer, digital cryptocurrency that was developed and released by a group of unknown independent programmers named Satoshi Nakamoto in 2008. Cryptocoin doesnt have any centralized server used for its issuing, transactions and storing, as it uses a distributed network public database technology named blockchain, which requires an electronic signature and is supported by a proof-of-work protocol to provide the security and legitimacy of money transactions. The issuing of Bitcoin is done by users with mining capabilities and is limited to 21 million coins. Currently, Bitcoins market cap surpasses $138 billion and this is the most popular kind of digital currency. Buying and selling cryptocurrency is available through special Bitcoin exchange platforms or ATMs.

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Latest News on Bitcoin | Cointelegraph

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Bitcoin Technical Analysis – FXStreet

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Bitcoin | Definition of Bitcoin by Merriam-Webster

variants: or less commonly bitcoin

: a digital currency created for use in peer-to-peer online transactions Introduced in 2008 by a person or group using the name Satoshi Nakamoto, Bitcoin is the most prominent of a group of virtual currenciesmoney that exists mainly as computer codethat have no central issuing authority. Carter Dougherty Bitcoin is backed by no government and has a fluctuating value linked in part to a scarcity that is mathematically predetermined. Unlike other forms of digital cash, Bitcoin is truly untraceable and therefore, like cash, cannot be recovered if lost or destroyed. Glenn Zorpette also usuallybitcoin : a unit of this currency Commercial space venture Virgin Galacticwhich announced on Nov. 22 that it would start accepting bitcoins to reserve a refundable $250,000 seat on a future tripis just the latest of many businesses that have recently embraced the decentralized virtual payment system. (At press time, 1 bitcoin was worth roughly $879.) Time

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Bitcoin | Definition of Bitcoin by Merriam-Webster


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