Monday, January 21, 2019
In Focus

Posted at: Dec 18, 2017, 12:23 AM; last updated: Dec 18, 2017, 12:23 AM (IST)

BIT by bit

BIT by bit
Bitcoin is successful only because of its potential for circumvention … it seems to me it ought to be outlawed. Joseph Stiglitz, Nobel Laureate

The origin

  • Bitcoin is the most popular cryptocurrency that was created by a mysterious person or a group of persons known as Satoshi Nakamoto. 
  • In 2008, he had circulated the original software in a white paper through a mailing list and thus created a consensus network that enabled the bitcoin payment system.
  • Bitcoin is the first decentralised peer-to-peer payment network that is powered by its users with no central authority, bank or intermediaries. 
Satoshi Nakamoto 

  • Apparently, Satoshi Nakamoto mined the first coins in 2009. It is estimated that his account contains about 980,000 bitcoins, worth about $15.2 billion.
  • Satoshi left the project in late 2010, never to be found again.
Who owns it

  • Bitcoin is an open source technology and no one owns the technology or the system.
How it works

  • Works like an app where one opens an account and pays money in fiat currency to purchase bitcoins, which can be kept in a password-protected digital wallet. 
  • The bitcoin network, however, records ever transaction in a public ledger called the 'blockchain'.
  • Bitcoin is not anonymous and taxmen can trace transactions with the help of technical experts.
Who can mine bitcoins

  • A technologically proficient and mathematical genius can mine bitcoins with the help of sophisticated computers. 
  • Miners use special software and hardware to solve mathematical problems and are issued some bitcoins in lieu of their services.
  • Miners thus help in keeping the cryptocurrency network or blockchains stable and secure. They are paid in bitcoins to maintain the system. 

  • Bitcoin has not been accepted as a legal tender by any country and it is largely unregulated. 
  • Some countries such as the US, Canada and Japan are having a softer approach. India has not taken any stand on it.
  • Countries like South Korea, Bolivia, Ecuador, Kyrgyzstan and Bangladesh have banned bitcoins.
  • Bitcoins, seized in anti-corruption operations in Bulgaria, are worth $3.6 billion; enough to retire a fifth of the country's $16.5 billion debt.
  • Ecommerce portals like Reddit, Wordpress, Overstock and Amazon accept bitcoins.
  • Traded at specific exchanges like Bitstamp, Coinbase, Bitfinex and Cryptsy.
  • ATMs exchanging bitcoins for dollars are located in cities like San Diego and Vancouver.


All readers are invited to post comments responsibly. Any messages with foul language or inciting hatred will be deleted. Comments with all capital letters will also be deleted. Readers are encouraged to flag the comments they feel are inappropriate.
The views expressed in the Comments section are of the individuals writing the post. The Tribune does not endorse or support the views in these posts in any manner.
Share On