The first Digital Currency to capture public attention was Bitcoin, which was launched in 2009, and reached $1,200 at its peak in December 2013. Bitcoin's success has spawned a number of competing Digital Currencies such as OneCoin, Ethereum, Ripple and Litecoin.
Bitcoin 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. From
a user perspective, Bitcoin is pretty much like cash for
Bitcoin made the Internet transactions quick and easy, as well as giving users new opportunities by revolutionizing the world of online payments. Thanks to Bitcoin – Digital Currency is recognized legally in more than 190 countries of the world. The rising cost of Bitcoin Digital Currency is driven by a continued optimism about the prospects for the development of electronic money. Today Digital Currency (Bitcoin) is accepted by 100,000 companies over the world, special automatic terminals for operations with Digital Currency exist. The increasing degree of acceptance of Bitcoin in offline and EURonline stores, the reservation service and etc. make it more convenient to use, along with a reduction in volatility, as more coins come into circulation. The more they are used as means of exchange, the more liquidity they gain. The increasing use will also help to determine a fair price of the Digital Currency.
Bitcoin is a system that relies on a decentralized ad hoc network, functioning without a central clearinghouse or other intermediary. The Bitcoin network is not controlled by any single institution in the same way as the central bank controls the fiat money circulation. Each computer involved in mining of Bitcoins and transaction processing is a part of this network.
Unlike the fiat money which can be additionally printed to increase the money supply, the Bitcoin Digital Currency system is designed so that the maximum number of Bitcoin coins is limited in it. According to the predetermined algorithm only 21 million coins can be issued. To this date about 12,000,000 Bitcoins are already issued. This makes 57% of all Bitcoins which will ever be issued, and by the year 2017 75% of coins will be issued. Every day there is about 3,600 new Bitcoins.
2. What is the Blockchain? Show Answer
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The Blockchain can be seen as the most prominent triple
entry bookkeeping system in existence. It is a distributed
database used as the public ledger of transactions for
Digital Currency. The Bitcoin transaction cannot be
canceled, unless the recipient actually sends the coins
back to the sender. Transactions of Bitcoin Digital
Currency line up into chains one after another. The
new transaction must indicate from which of the previously
created transactions the coins are taken. Blockchain
– is a collective public register the whole Bitcoin
network is based on. All the confirmed transactions
are included in the Blockchain. Integrity and the chronological
order of the Blockchain are based on a reliable cryptography.
If You Understand Google Docs, You Can Understand
William Mougayar | Published September 8, 2016
The "New Database"
The idea that the blockchain is another kind of database
is a popular analogy that has been used a lot (I wrote
about this subject almost two years ago). In reality,
the blockchain doesn't disrupt databases, but it disrupts
how databases get synchronized between each other.
Imagine two entities (eg banks) that need to update
their own user account balances when there is a request
to transfer money from one customer to another. They
need to spend a tremendous (and costly) amount of time
and effort for coordination, synchronization, messaging
and checking to ensure that each transaction happens
exactly as it should.
Typically, the money being transferred is held by the
originator until it can be confirmed that it was received
by the recipient. With the blockchain, a single ledger
of transaction entries that both parties have access
to can simplify the coordination and validation efforts
because there is always a single version of records,
not two disparate databases. Let's take that analogy
further into the shared documents domain, and think
about what happens when we share a document where two
or more users need to make changes to it.
The traditional way of sharing documents with collaboration
is to send a Microsoft Word document to another recipient,
and ask them to make revisions to it.
The problem with that scenario is that you need to wait
until receiving a return copy before you can see or
make other changes, because you are locked out of editing
it until the other person is done with it.
That's how databases work today. Two owners can't update
the same record at once. That's how banks maintain money
balances and transfers; they briefly lock access (or
decrease the balance) while they make a transfer, then
update the other side, then re-open access (or update
With Google Docs (or Google Sheets), both parties have
access to the same document at the same time, and the
single version of that document is always visible to
both of them. It is like a shared ledger, but it is
a shared document. The distributed part comes into play
when sharing involves a number of people.
Imagine the number of legal documents that should be
used that way. Instead of passing them to each other
and losing track of versions, why can’t all business
documents become shared instead of transferred back
and forth? So many types of legal contracts would be
ideal for that kind of workflow.
You don’t need a blockchain to share documents, but
the shared documents analogy is a powerful one.