New Coins for Dummies, Bitcoin

Multinational companies such as MicroStrategy Time Inc. and Dish Network allow payment with Bitcoins, as do Virgin Galactic and Reddit, to name a few. A significant number of companies and small businesses now accept Bitcoins as payment for services of all kinds. Bitcoin ATM. Bitcoin and local currencies are often exchanged through online platforms, face-to-face meetings, and dedicated ATMs.

There are a variety of platforms that facilitate the exchange of Bitcoin for other cryptocurrencies, including stablecoins. Transactions with Bitcoins are usually conducted through a platform called a «wallet» or «purse,» which is either intangible in the form of software or tangible in the form of electronic devices.

New Coins for Dummies: Bitcoin

How far is bitcoin legal

This article or section needs references that appear in a reputable publication. The use of Bitcoin and related services is subject to the laws of individual countries, provinces, municipalities, or other administrative entities, and may be legal or illegal depending on whether there is a decree or explicit decision by a competent regulatory authority to recognize or treat Bitcoin as a currency, value, commodity, etc.

A little history of the launch

On November 1, 2008, a message signed with the pseudonym Satoshi Nakamoto and titled «Bitcoin P2P e-cash paper» was sent to a cryptocurrency mailing list owned by the limited partnership Metzger, Dowdeswell & Co. On January 3, 2009, the first peer-to-peer network based on this protocol went live after launching the first open-source software to run Bitcoin nodes, which also marked the creation of the first Bitcoins and the beginning of Bitcoin mining. The first block of Bitcoins, called the Genesis block, is mined by Satoshi Nakamoto himself.

Satoshi Nakamoto
Satoshi-Nakamoto

Notable events

On November 27, 2013, bitcoin crossed the $1,000 threshold for the first time, recording a price increase of 4,000% since the beginning of the year. On June 20, 2017, the code point U+20BF was added in the Unicode Standard to represent the bitcoin symbol. On August 1, 2017, the cryptocurrency Bitcoin Cash was born as a result of the split of the Bitcoin network, a hard fork. On Christmas, December 25, 2020, Bitcoin reached a value of 496,000 Mexican pesos and broke through the half-million pesos barrier the following day.

On February 16, 2021, the price of a bitcoin unit reached one million Mexican pesos for the first time, at the same time that it reached $50,000, it reached a price of 1,014,345 Mexican pesos on Mexican exchanges. On May 19, 2021, bitcoin fell to $30,000, recording a 30% drop from the previous day. On June 9, 2021, El Salvador will become the first country to legalize bitcoin as an official currency.

Addresses

In order to interact with the Bitcoin network, nodes and wallets, any number of cryptographic key pairs are managed, which can be generated without any restrictions.

Transactions

Bitcoin is a UTXO-based system. When a user wants to transfer monetary units to another user, he creates a transaction – specifying the amount of bitcoins he wants to spend from the UTXO he wants to spend and the recipient’s address – signs it with his private key and transmits it to the Bitcoin network.

New Coins for Dummies: Bitcoin

Privacy

The public can see someone sending an amount of money to another person without the transaction being associated with any person. Because of the transparency of bitcoin’s network and public transaction log, a user who wants to protect his privacy must prevent his real identity from being associated with his addresses, since any outside observer can analyze their content and the source and destination addresses of transactions at any time. As an additional firewall, a new key pair should be used for each transaction to prevent them from being linked to a common owner. The European Central Bank points out that there is no deposit insurance for Bitcoin funds and that all such risks must be borne directly by the user.

New Coins for Dummies: Bitcoin

According to digiconomist , a website cited by several newspapers, a single Bitcoin transaction consumes up to 1,122,196 Visa card payments, which is equivalent to 36 days of electricity consumption by an average U.S. family household and 84,388 hours of YouTube viewing. In 2021, bitcoin mining consumes the same energy as Argentina. The validity of the comparison of the above figures is often questioned, as a Bitcoin transaction is not comparable to a Visa card transaction.

Elon Musk said in May 2021 that Tesla would not accept Bitcoin payments because the transaction incurred high carbon interest, adding that carbon is the most polluting energy source of all. Even the European Central Bank issued an official statement calling Bitcoin’s carbon impact «exorbitant.»

In a scientific study published in Nature in 2018, it was estimated that the carbon dioxide generated by Bitcoin alone will cause a global temperature increase of more than 2 degrees Celsius in less than three decades. The Bank of Italy noted in an official statement that the electricity consumption of the entire instant transfer and direct debit network in Europe was 40,000 times lower than that of the Bitcoin network alone in 2019.

New Coins for Dummies: Bitcoin

Critical voices

Many economists and bitcoin and cryptocurrency enthusiasts are constantly voicing their opinions and predictions about the future of bitcoin. For some Bitcoin deniers, «there is a very high risk of a collapse of Bitcoin, which many economists believe has a real value of zero. Bitcoin is now a floating mine and almost all financial regulators warn against it.» At the end of 2017, bitcoin exceeds and multiplies the thresholds that some mainstream economists use to identify financial bubbles and collapse situations.

Source article Wikipedia

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