BITCOIN , it is what all you need to know

What is Bitcoin ?

Bitcoin is the first global, decentralized currency that allows you to send money from one person to another without involving a third party broker, such as a bank. You only need your computer to make transactions because Bitcoin is fundamentally software.

As a decentralized currency, Bitcoin isn’t controlled by anyone. It’s open so that anyone can benefit from it.

You might think that the lack of control could mean chaos, but that’s not true at all. That’s because Blockchain, the technology behind Bitcoin is one of the most accurate and secure systems ever created

How Does Bitcoin Work?

A blockchain is a ledger that keeps records of digital transactions. Instead of having a central administrator, like a bank or the government, blockchain organizes data in batches called blocks. These data batches use cryptographic validation to link themselves together. In other words, each block identifies and references the previous block by a hash value (Hash function - Wikipedia), forming an unbroken chain.

Blockchain solves two of the most challenging problems of digital transactions : controlling the information and avoiding duplication. When a purchase is carried out, the ledger records it and sends it out to the entire network. Computers all over the world then compete to confirm the operation by solving complex math equations. The first to figure out the answer and validate the block receives a reward in Bitcoins (this process is called mining.)

The validated block is timestamped and added to a chain in chronological order. The entire chain is continually updated so that it’s always an accurate representation of who owns what at any given time.

Is it Legal?

The legality of Bitcoin depends on where you’re located. Bitcoin was legalized as a formal method of payment in Japan this year, and India might be next. In most countries, however, it somewhat operates in a gray zone, with no official ban or approval of Bitcoin.

Who’s Behind it?

The founder of Bitcoin is Satoshi Nakamoto, an anonymous online alias for a forum poster. The founder remains unknown, and no one truly knows who the actual founder is.

At the moment, Bitcoin is owned by the community as a whole, as it is an open source initiative, with no single owner behind it. It is a community movement.

Why Bitcoin ?

 Get rid of transaction costs

Because no third party is needed, there is nobody charging a transaction cost. Banks, card issuers and payment processors places a 1-5% transaction fee on that coffee you bought this morning, and everything else you buy. This is not very visible in everyday life, because it's almost always baked into the price of things, but if you start transferring money internationally with companies like Western Union, you realize that there is quite a bit of money in the business of transferring money.

Take currency power away from banks and government

Banks and government have the legal and physical ability to create money. I won't get into the details (http://en.wikipedia.org/wiki/Mon...) of how that works, but the main problem is that whenever money is created, it dilutes the value of everyone's money, which makes it a super-fast, completely silent, taxation.

Sometimes, governments and banks use this power responsibly, but sometimes, they do not. Lately, there has been a lot of the latter, with the Financial crisis of 2007–08caused by irresponsible lending, so a lot of people are starting to think that we probably are more reliant on banks and government that we want to be. 

So what's preventing another person from transferring money from my wallet to their own?

This is where cryptography comes in. When your Bitcoin wallet is generated, it's given to you in two parts. One public part, an address, that you give to other people so that they know where to send you money, and a secret part, a key.

The key is used to "sign" transactions. It takes the amount, the sender address, receiver address, and the key, jumbles it together with math, and out comes a signature, that you put in the ledger along with the transactions. Due to how cryptography works, other people can mathematically verify that the person that generated this signature for this transaction must indeed have the key for this wallet. They can, however, not work backwards to what the key actually is - that would take a supercomputer thousands of years to do.. 

I have been fan of Bitcoin from the last year , 2013 at which the price of 1  Bitcoin was nearly equalent to 100 USD and now I have owing around 9.2 BTC  

Currently 1 Bitcoin= 20782.87 Rupee

1 Bitcoin=269 Euro

In the coming post we will talk about how to get Bitcoins .? or how to make money using Bitcoin .