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25th February 2018VIDEOS
Bitcoin: Everything You Need to Know About the Top Cryptocurrency By Jay Greenberg

Bitcoin: Everything You Need to Know About the Top Cryptocurrency

Over recent months, Bitcoin and other cryptocurrencies have gone mainstream as decentralized digital currencies reach dizzying highs in terms of value. The price for one Bitcoin pushed past $10,000 for the first time in December 2017 and continued to rise up close to $20,000 before Christmas. $10,000 is double the value that Bitcoin was in November, ten times what it was in January 2017 and an astonishing 100,000 times what it was worth in 2010. While some investors remain cautious, others are trying to capitalize on the trend. Some people are so confident in the future of cryptocurrencies, they are even trying to sell their house for Bitcoin. But what is it Bitcoin and cryptocurrency and why is it so valuable? Let's examine these 21st-century currencies that exist only in the modern world. What is Bitcoin? Bitcoin was the first of what has become known as "cryptocurrencies". These are forms of digital money that use encryption to secure transactions and control the creation of new units. The plan was to make a form of currency not controlled by governments or businesses, that you could trade globally with no cost and without having to reveal your identity. The popularity of Bitcoin has spawned many copycats - sometimes called "altcoins". To make things more confusing, there are also "second-generation" virtual currencies like Ethereum and Bitcoin Cash. So they’re not like the coins in my purse or wallet? No. They are essentially a line of numbered “code” - instructions used in computer programming. However, once purchased they can be exchanged for some goods and services, like normal money. Where did Bitcoin come from? Created by a mysterious developer who uses the pseudonym Satoshi Nakamoto, Bitcoins exploded on to the financial scene in 2013, following enormous increases in their value. In the original Bitcoin white paper, Nakamoto describes his creation as a "peer-to-peer version of electronic cash", allowing "online payments to be sent directly from one party to another without going through a financial institution". How does Bitcoin work? Nakamoto wrote that such a currency uses "cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party". This sort of stateless, bank-free currency uses a distributed, cryptographically secure "blockchain" to record payment transactions. Recording of payments onto the blockchain is powered by users, who offer their computer power. They are rewarded with newly created Bitcoins, and this activity is referred to as mining. What determines their value? Like many things, it comes down to supply and demand. New Bitcoins are released at a rate of about 25 new coins every 10 minutes. But the flow will dry up as they have been designed to ensure that no more than 21 million will ever exist. Today, around 16 million are in use.

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