What Are Bitcoins? Virtual Currency Explained (Like You re an Idiot) – ABC News

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Members of Congress today will get a crash course on bitcoin, the digital “currency” that permits users to conduct transactions online. In just five years the virtual currency has gone from being worth pennies to almost $600 apiece. It has funded nascent democracy movements as well as a ample underground marketplace for illegal drugs and weapons.

We set out to response the question: What Are Bitcoins?

Below is an attempt to reaction that and many other questions surrounding the virtual currency. And we promise to speak truly, indeed leisurely.

When I was Four, I bit a coin, gulped it, and had to go to the emergency room. I’ve had a fear of payphones and gumball machines ever since. Thank goodness Congress has eventually gotten around to fixing the scourge of people biting coins. Wait. is this the same thing?

You never have to worry about gagging on a bitcoin. Unlike U.S. quarters, Canadian loonies, or, for that matter, the currencies of every country in the world, bitcoins are downright virtual. They exist only online and are not managed by a central authority like the Federal Reserve.

If hard currency is like a record, then a bitcoin is like an MP3.

That means you can’t get them from a bank, or drop them in a wishing well. All transactions take place in an online marketplace, where users are untraceable.

If I can’t hide it under my mattress, how can I know my stash is safe?

You hold bitcoins in an online “wallet.” This is an account set up on a secure third-party website.

Unlike banks, wallet firms won’t invest your money. Nor do they assure the same protections afforded banks by institutions like the FDIC.

If your wallet is hacked and your bitcoins are stolen, there is not much you can do about it.

This sounds a lot like the coins from Super Mario Brothers. Do I have to bang my head against a brick wall to get the money?

Fresh bitcoins inject the market by a process called “mining.” Available bitcoins are hidden amid a elaborate encrypted computer program. Users’ computers are working round the clock to solve a complicated mathematical problem in order to release fresh coins.

The easiest-mined bitcoins have already been discovered. Finding fresh coins requires massive amounts of computing power. That has led some hackers to take over unsuspicious users’ computers to corset their power to mine for more bitcoins.

The system is designed to require more work to get coins as time goes by, that makes the currency’s growth rate, also known as inflation, constant and predictable.

About eleven million bitcoins have already been found. But only twenty one million exist in total.

How do I use bitcoins? I have a feeling my kids won’t be glad when I tell them they’re getting virtual currency for Christmas.

You can use bitcoins to buy anything with which you would use any other kind of currency. There’s just one giant hitch: the business has to accept bitcoins, and most don’t.

When you want to buy something, you find out the anonymous identification number fastened to the seller’s wallet, and transfer coins from your wallet to his.

It’s this anonymity that has made the currency popular with drug dealers.

Drug dealers? I knew this sounded sketchy. Are these things even legal?

Recently, Silk Road, an online marketplace for illicit drugs, which used bitcoins to facilitate transactions was shut down by the FBI.

Like cash, bitcoins are untraceable, which makes drug dealers like them. Unlike cash, however, bitcoins can lightly be transferred anywhere in the world.

For now bitcoins are legal, so long as they’re being used for legal purchases.

At today’s Senate Homeland Security Committee hearing, a lawyer for bitcoin is expected to ask Congress to “chart a safe and sane regulatory course” without limiting its economic potential.

Patrick Murck, general counsel for the Bitcoin Foundation, is expected to tell the committee that bitcoins are vital for developing economies and developing democracies. They permit users to spend money on political acts that some governments might find menacing and they let users sidestep corrupt practices and punitive taxes.

“Bitcoin can facilitate private and anonymous transactions, which are resistant to oversight and control,” Murck will testify, according to released copies of his remarks. “This by no means implies that using Bitcoin can or should provide anyone immunity from the law.”

Who came up with this entire idea in the very first place?

It’s a bit weird. Officially, bitcoins were invented by a Japanese programmer named Satoshi Nakamot, who outlined the process in an academic paper before disappearing in 2009, shortly after the very first bitcoins were released.

Satoshi is widely believed to be a pseudonym and given his use of English in some of those papers, many believe he is an American.

What are bitcoins actually worth?

As of today, one bitcoin is worth $568, leading many to believe they are overvalued and the bubble is likely to burst.

The currency is utterly volatile. There’s no control over how bitcoins are valued against other currencies and there are no large exchanges that can prevent manipulation and speculation.

Every time bitcoins make the news – like when Silk Road was shuttered, or when the tech investor Winklevoss twins – exposed they wielded million of dollars in bitcoins, the value has insanely fluctuated.

So, if they’re this invisible, virtual currency, how is it that people keep biting them?

What Are Bitcoins? Virtual Currency Explained (Like You re an Idiot) – ABC News

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Members of Congress today will get a crash course on bitcoin, the digital “currency” that permits users to conduct transactions online. In just five years the virtual currency has gone from being worth pennies to almost $600 apiece. It has funded nascent democracy movements as well as a hefty underground marketplace for illegal drugs and weapons.

We set out to reaction the question: What Are Bitcoins?

Below is an attempt to reaction that and many other questions surrounding the virtual currency. And we promise to speak truly, truly leisurely.

When I was Four, I bit a coin, guzzled it, and had to go to the emergency room. I’ve had a fear of payphones and gumball machines ever since. Thank goodness Congress has ultimately gotten around to fixing the scourge of people biting coins. Wait. is this the same thing?

You never have to worry about gasping on a bitcoin. Unlike U.S. quarters, Canadian loonies, or, for that matter, the currencies of every country in the world, bitcoins are entirely virtual. They exist only online and are not managed by a central authority like the Federal Reserve.

If hard currency is like a record, then a bitcoin is like an MP3.

That means you can’t get them from a bank, or drop them in a wishing well. All transactions take place in an online marketplace, where users are untraceable.

If I can’t hide it under my mattress, how can I know my stash is safe?

You hold bitcoins in an online “wallet.” This is an account set up on a secure third-party website.

Unlike banks, wallet firms won’t invest your money. Nor do they ensure the same protections afforded banks by institutions like the FDIC.

If your wallet is hacked and your bitcoins are stolen, there is not much you can do about it.

This sounds a lot like the coins from Super Mario Brothers. Do I have to bang my head against a brick wall to get the money?

Fresh bitcoins come in the market by a process called “mining.” Available bitcoins are hidden amid a sophisticated encrypted computer program. Users’ computers are working round the clock to solve a complicated mathematical problem in order to release fresh coins.

The easiest-mined bitcoins have already been discovered. Finding fresh coins requires thick amounts of computing power. That has led some hackers to take over unsuspicious users’ computers to corset their power to mine for more bitcoins.

The system is designed to require more work to get coins as time goes by, that makes the currency’s growth rate, also known as inflation, constant and predictable.

About eleven million bitcoins have already been found. But only twenty one million exist in total.

How do I use bitcoins? I have a feeling my kids won’t be glad when I tell them they’re getting virtual currency for Christmas.

You can use bitcoins to buy anything with which you would use any other kind of currency. There’s just one yam-sized hitch: the business has to accept bitcoins, and most don’t.

When you want to buy something, you find out the anonymous identification number linked to the seller’s wallet, and transfer coins from your wallet to his.

It’s this anonymity that has made the currency popular with drug dealers.

Drug dealers? I knew this sounded sketchy. Are these things even legal?

Recently, Silk Road, an online marketplace for illicit drugs, which used bitcoins to facilitate transactions was shut down by the FBI.

Like cash, bitcoins are untraceable, which makes drug dealers like them. Unlike cash, however, bitcoins can lightly be transferred anywhere in the world.

For now bitcoins are legal, so long as they’re being used for legal purchases.

At today’s Senate Homeland Security Committee hearing, a lawyer for bitcoin is expected to ask Congress to “chart a safe and sane regulatory course” without limiting its economic potential.

Patrick Murck, general counsel for the Bitcoin Foundation, is expected to tell the committee that bitcoins are vital for developing economies and developing democracies. They permit users to spend money on political acts that some governments might find menacing and they let users sidestep corrupt practices and punitive taxes.

“Bitcoin can facilitate private and anonymous transactions, which are resistant to oversight and control,” Murck will testify, according to released copies of his remarks. “This by no means implies that using Bitcoin can or should provide anyone immunity from the law.”

Who came up with this entire idea in the very first place?

It’s a bit weird. Officially, bitcoins were invented by a Japanese programmer named Satoshi Nakamot, who outlined the process in an academic paper before disappearing in 2009, shortly after the very first bitcoins were released.

Satoshi is widely believed to be a pseudonym and given his use of English in some of those papers, many believe he is an American.

What are bitcoins actually worth?

As of today, one bitcoin is worth $568, leading many to believe they are overvalued and the bubble is likely to burst.

The currency is enormously volatile. There’s no control over how bitcoins are valued against other currencies and there are no large exchanges that can prevent manipulation and speculation.

Every time bitcoins make the news – like when Silk Road was shuttered, or when the tech investor Winklevoss twins – exposed they wielded million of dollars in bitcoins, the value has frantically fluctuated.

So, if they’re this invisible, virtual currency, how is it that people keep biting them?

What Are Bitcoins? Virtual Currency Explained (Like You re an Idiot) – ABC News

Sections

Yahoo!-ABC News Network | © two thousand seventeen ABC News Internet Ventures. All rights reserved.

  • Yahoo!-ABC News Network | © two thousand seventeen ABC News Internet Ventures. All rights reserved.
  • 0 Shares

Tomohiro Ohsumi/Bloomberg via Getty Photos

  • 0 Shares

Members of Congress today will get a crash course on bitcoin, the digital “currency” that permits users to conduct transactions online. In just five years the virtual currency has gone from being worth pennies to almost $600 apiece. It has funded nascent democracy movements as well as a ample underground marketplace for illegal drugs and weapons.

We set out to response the question: What Are Bitcoins?

Below is an attempt to reaction that and many other questions surrounding the virtual currency. And we promise to speak truly, indeed leisurely.

When I was Four, I bit a coin, gulped it, and had to go to the emergency room. I’ve had a fear of payphones and gumball machines ever since. Thank goodness Congress has ultimately gotten around to fixing the scourge of people biting coins. Wait. is this the same thing?

You never have to worry about gasping on a bitcoin. Unlike U.S. quarters, Canadian loonies, or, for that matter, the currencies of every country in the world, bitcoins are downright virtual. They exist only online and are not managed by a central authority like the Federal Reserve.

If hard currency is like a record, then a bitcoin is like an MP3.

That means you can’t get them from a bank, or drop them in a wishing well. All transactions take place in an online marketplace, where users are untraceable.

If I can’t hide it under my mattress, how can I know my stash is safe?

You hold bitcoins in an online “wallet.” This is an account set up on a secure third-party website.

Unlike banks, wallet firms won’t invest your money. Nor do they assure the same protections afforded banks by institutions like the FDIC.

If your wallet is hacked and your bitcoins are stolen, there is not much you can do about it.

This sounds a lot like the coins from Super Mario Brothers. Do I have to bang my head against a brick wall to get the money?

Fresh bitcoins come in the market by a process called “mining.” Available bitcoins are hidden amid a sophisticated encrypted computer program. Users’ computers are working round the clock to solve a complicated mathematical problem in order to release fresh coins.

The easiest-mined bitcoins have already been discovered. Finding fresh coins requires large amounts of computing power. That has led some hackers to take over unsuspicious users’ computers to corset their power to mine for more bitcoins.

The system is designed to require more work to get coins as time goes by, that makes the currency’s growth rate, also known as inflation, constant and predictable.

About eleven million bitcoins have already been found. But only twenty one million exist in total.

How do I use bitcoins? I have a feeling my kids won’t be blessed when I tell them they’re getting virtual currency for Christmas.

You can use bitcoins to buy anything with which you would use any other kind of currency. There’s just one meaty hitch: the business has to accept bitcoins, and most don’t.

When you want to buy something, you find out the anonymous identification number fastened to the seller’s wallet, and transfer coins from your wallet to his.

It’s this anonymity that has made the currency popular with drug dealers.

Drug dealers? I knew this sounded sketchy. Are these things even legal?

Recently, Silk Road, an online marketplace for illicit drugs, which used bitcoins to facilitate transactions was shut down by the FBI.

Like cash, bitcoins are untraceable, which makes drug dealers like them. Unlike cash, however, bitcoins can lightly be transferred anywhere in the world.

For now bitcoins are legal, so long as they’re being used for legal purchases.

At today’s Senate Homeland Security Committee hearing, a lawyer for bitcoin is expected to ask Congress to “chart a safe and sane regulatory course” without limiting its economic potential.

Patrick Murck, general counsel for the Bitcoin Foundation, is expected to tell the committee that bitcoins are vital for developing economies and developing democracies. They permit users to spend money on political acts that some governments might find menacing and they let users sidestep corrupt practices and punitive taxes.

“Bitcoin can facilitate private and anonymous transactions, which are resistant to oversight and control,” Murck will testify, according to released copies of his remarks. “This by no means implies that using Bitcoin can or should provide anyone immunity from the law.”

Who came up with this entire idea in the very first place?

It’s a bit weird. Officially, bitcoins were invented by a Japanese programmer named Satoshi Nakamot, who outlined the process in an academic paper before disappearing in 2009, shortly after the very first bitcoins were released.

Satoshi is widely believed to be a pseudonym and given his use of English in some of those papers, many believe he is an American.

What are bitcoins actually worth?

As of today, one bitcoin is worth $568, leading many to believe they are overvalued and the bubble is likely to burst.

The currency is utterly volatile. There’s no control over how bitcoins are valued against other currencies and there are no large exchanges that can prevent manipulation and speculation.

Every time bitcoins make the news – like when Silk Road was shuttered, or when the tech investor Winklevoss twins – exposed they wielded million of dollars in bitcoins, the value has frantically fluctuated.

So, if they’re this invisible, virtual currency, how is it that people keep biting them?

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