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What are BITCOINS?

1. Bitcoin is a virtual currency that rises in value. Only 21 million coins will be mined or made. It is also known as a Crypto Currency.
2. Bitcoin is a secure merchant payment system that has NO CHARGEBACKS OR FRAUD.

  • About Bitcoins (short story)

    What BitCoin is: An agreement amongst a community of people to use 21 million secure mathematical tokens–”bitcoins”–as money, like traditional African and Asian societies used the money cowry.

    Unlike the money cowry:

    ” there will never be more bitcoins

    ” they are impossible to counterfeit

    ” they can be divided into as small of pieces as you want

    ” and they can be transferred instantly across great distances via a digital connection such as the internet.

    This is accomplished by the use of powerful cryptography many times stronger than that used by banks. Instead of simply being “sent” coins have to be cryptographically signed over from one entity to another, essentially putting a lock and key on each token so that bitcoins can be securely backed up in multiple places, and so that copying doesn’t increase the amount you own.

    Because bitcoins are given their value by the community, they don’t need to be accepted by anyone else or backed by any authority to succeed. They are like a local currency except much, much more effective and local to the whole world. As an example of how effective the community is at “backing” the bitcoin: on April 4th 2011 30,000 bitcoins were abruptly sold on the largest BitCoin exchange, consuming nearly all “buy” offers on the order book and dropping the price by nearly 1/3. But within a couple of days, the price on the exchange had fully rebounded and bitcoins were again trading at good volumes, with large “buy” offers slowly replacing the ones consumed by the trades. The ability of such a small economy (there were only 5 million out of the total 21 million bitcoins circulating then, or about 3.75 million USD worth at then-current exchange rates) to absorb such a large sell-off without crashing shows that bitcoins were already working beautifully.

    What problem BitCoin solves: Mathematically, the specific implementation of the bitcoin protocol solves the problem of “how to do all of the above without trusting anyone”. If that sounds amazing, it should! Normally a local currency has to trust all kinds of people for it to be able to work. So does a national currency. And in both cases, that trust is often abused. But with BitCoin, there’s no one person who can abuse the system. Nobody can print more money, nobody can re-use the coins simply by making a copy, and nobody can use anyone else’s coins without having direct access to their keys. People who break its mathematical “rules” simply end up creating a whole different system incompatible with the first. As long as these rules are followed by someone, the only way BitCoin can fail is for everyone to stop using it.

    This marvelous quality of not having to trust anyone is achieved in two ways. First, through the use of cutting-edge cryptography. Cryptography ensures that only the owner of the bitcoins has the authority to spend them. The cryptography used in BitCoin is so strong that all the world’s online banking would be compromised before BitCoin would be, and it can even be upgraded if that were to start to happen. It’s like if each banknote in your pocket had a 100-digit combination lock on it that couldn’t be removed without destroying the bill itself. BitCoin is that secure.

    But the second way of securing the system, called the blockchain, is where the real magic happens. The blockchain is a single, authoritative record of confirmed transactions which is stored on the peer to peer bitcoin network. Even with top-notch digital encryption, if there was no central registry to show that certain bitcoins had already been “paid” to someone else, you could sign over the same coins to multiple people in what’s called a double-spend attack, like writing cheques for more money than you have in your account. Normally this is prevented by a central authority, the bank, who keeps track of all the cheques you write and makes sure they don’t exceed the amount of money you have. Even so, most people won’t accept a cheque from you unless they really trust you, and the bank has to spend a lot of money physically protecting those central records, whether they are kept in a physical or digital form. Not to mention, sometimes a bank employee can abuse their position of trust. And, in traditional banking, the bank itself doesn’t have to follow the rules you do–it can lend out more money than it actually has.

    The blockchain fixes all these problems by creating a single master registry of the already-cryptographically-secured bitcoin transfers, verifying them and locking them down in a highly competitive market called mining. In return for this critical role, the BitCoin community rewards miners with a set amount of bitcoins per block, taken from the original limited quantity on a pre-agreed schedule. As that original amount gradually runs out, this reward will be replaced by fees paid to prioritise one transaction over another–again in a highly competitive market to ensure the lowest possible cost. The transactions are verified and locked in by the computational work of mining in a very special way so that no one else can change the official record of transactions without doing more computational work than the cumulative work of all miners across the whole network.

    In conclusion: All this mathematical technology may be a bit of a mouthful, but what it means in practice is that BitCoin works just like cash. Bitcoin transactions are intentionally irreversible–unlike credit cards or PayPal where chargebacks can invalidate a payment that has already been made. And there are no middlemen. Transactions are completed directly between the sender and the receiver via the peer to peer network.

    Because of BitCoin’s intricate design, the network remains secure no matter where or how you process bitcoin transactions. Which is incredible–no one else has ever tried to create a system that worked this way! All previous monetary systems have relied on trusting somebody, whether it was the king, town hall, the federal reserve, or banks. BitCoin doesn’t. It’s guaranteed instead by the laws of mathematics, and that’s why it has everyone from technologists to economists very excited. I’m sure you have lots more questions, so scan the index below to see if they’ve been asked before, then dive in! The so-called “canonical” threads linked from this index are considered newbie-friendly zones; outside of them you’re welcome to try your own luck.

     

    bitcoin accepted here About

    About Bitcoins (long story)

    What are bitcoins or BTC?

    You can think of bitcoins simply as DIGITAL COINS for the internet.

    These coins get sent similar to how you send an email — enter someone’s address, and press send.

    Bitcoins can be sent, received and managed through various independent websites, PC clients and mobile device software  (iOs, Android).

    History

    In 2008 the world witnessed the introduction of Bitcoin, an open source software project using peer-to-peer (p2p) and cryptographic software technology. While Bitcoin originates outside the traditional banking system, the software is positioned as a distributed global payments system (Satoshi Nakamoto, 2008).

    Around the same time in 2008, a crisis struck the contemporary banking system in the USA, quickly growing into a global crisis. Many banks were ‘bailed out’ by governments around the world in order to restore trust and prevent the problems resulting from catastrophous cascading failures elsewhere in the banking system in case these banks would fail. Currently, several southern-European countries such as Spain, Portugal and Italy are experiencing difficulties getting government finances in order. Bitcoin arrives in a time of financial unrest when money and banking have become the subject of debate.

    Bitcoin Mining is really not what Bitcoin is about, that is just part of the underlying tech — used to process/verify the various transactions occurring 24/7 in the Bitcoin ecosystem. However Bitcoin Mining is really profitable as Bitcoin Miners receive handsome rewards for providing their servers/software’s idle time.

    Bitcoin is a system that allows you to transfer units of value around, and these units are called “bitcoins”. You can buy some bitcoins from anyone who has them, on an exchange, or in person, or whatever (think of how you would buy gold coins).

    You can sell bitcoins at any time on an exchange as well. (ie MTgox or Bitstamp.com).

    Once you have some bitcoins, you can now send them to others in exchange for goods/services — just like how you could trade a gold coin to someone before we had fiat money like the Euro or US dollar.

    There are no accounts, just addresses. You can get an address at any time by using the software, and you can have as many addresses as you like. A bitcoin address is like an email address — you tell it to someone so that you can receive bitcoins from them.

    Anyone can create as many addresses as they like, and no one can stop you from sending bitcoins anywhere, and no one can stop you from taking your bitcoins with you anywhere you go (they wont know how many you have, or if you have any, since you can simply memorize your password, and thats all you need to spend your coins). The cost to send bitcoins is extremely low (close to zero) for any amount.

    You can spend them anywhere that someone accepts them — this list includes thousands of places and grows every day.

    There will only ever be 21 million bitcoins, and there is no one in control of the network — to make any change to the protocol, a majority of the users need to vote to alter it. Each Bitcoin is divisible by one hundred million. You can thus possess 0.00000001 Bitcoins. 1 (BTC) Bitcoin is now valued at USD 12 each.

    People with a knack for investing understand the value of spotting the NEXT BIG THING before anyone else does.

    Sample this – a single bitcoin was worth 80 cents (USD 0.80) at the beginning of 2011, and as of Sept 2012 , it is worth over USD 12.00 dollars !!!!!! ( as of 26 Sept 2012 ). Oppa Bitcoin wow!

    6 DEC 2012 price : 1 BTC = USD 13.27

    BITCOIN STATS:

    As of Sept 2012, there are roughly 12,000 bitcoin miners around the globe; 10 million btc in existence; Mtgox.com handles over USD 1 million exchanges per day ; USD 200 million in the btc ecosystem ; over 1000 merchants accepting btc in the USA (thanks to Bit-pay.com) and it’s attracting a lot of VC and Silicon Valley attention !

    BELOW: How a Bitcoin Transaction works!

    how bitcoin works workflow 1 300x227 About

    ANOTHER BITCOIN FAQ:

    Bitcoin is a decentralized electronic cash system using digital signatures and cryptographic proof to enable irreversible payments between parties without relying on trust. Leveraging the breakthroughs of public-key cryptography, bitcoin also uses peer-to-peer networking to operate without a central authority whereby the new issuance and transaction verification functions are carried out collectively by the network. In the absence of a third-party processing intermediary, transactions are rapid and simple to send and receive with little to no fees.

    As both a payments platform and a nonpolitical unit of account, Bitcoin has already seen astonishing growth in just over three years. Bitcoin’s total base money supply is currently valued at $125 million. Number of transactions has gone from 219 in 2009 to 4,964,513 year-to-date in 2012. The value of bitcoins transferred per year has gone from 35 trillion BTC to 60,896 trillion BTC. And, the network hashing rate, which is a measure of computational speed or horsepower, has increased from 0.008 Giga hashes per second in December 2009 to 19,284 Giga hashes per second in September 2012, thereby making it the largest distributed computing project in the world today in terms of processing performance. (Source: State of the Coin 2012)

    BELOW – WHAT ARE BITCOINS?

    BITCOIN FAQ

    What are bitcoins?

    Bitcoins are the unit of currency of the Bitcoin system. A commonly-used shorthand for this is “BTC” to refer to a price or amount (eg: “100 BTC”) A bitcoin isn’t actually a ‘thing’ you can point at. It is just a number associated with a bitcoin address.

    How can I get bitcoins?

    There are three ways to get bitcoins:

    • Buy them on an exchange such as Mt. Gox or other btc trading/exchange sites. A Singapore based site called Dgtmkt accepts deposits via Maybank or CIMB. (Bitcoin Investor)
    • Accept bitcoins as payment for goods or services. (Merchant Systems)
    • Create a new ‘block’ (currently yields 50 bitcoins) or join a mining pool. (Bitcoin Miner) – Bitcoin mining is used to distribute the initial coins of this new currency. This is why you can earn bitcoins with your CPU, GPU or special bitcoin servers: initial coins and fee’s paid by those that perform transactions are distributed to the bitcoin miners.

     

    How are new bitcoins created?

    New coins are generated by a network node each time it finds the solution to a certain mathematical problem (i.e. creates a new block), which is difficult to perform and can demonstrate a proof of work. The reward for solving a block is automatically adjusted so that in the first 4 years of the Bitcoin network, 10,500,000 BTC will be created. The amount is halved each 4 years, so it will be 5,250,000 over years 4-8, 2,625,000 over years 8-12 and so on. Thus the total number of coins will approach 21,000,000 BTC over time.

    In addition, built into the network is a system that attempts to allocate new coins in blocks about every 10 minutes, on average, somewhere on the network. As the number of people who attempt to generate these new coins changes, the difficulty of creating new coins changes. This happens in a manner that is agreed upon by the network as a whole, based upon the time taken to generate the previous 2016 blocks. The difficulty is therefore related to the average computing resources devoted to generate these new coins over the time it took to create these previous blocks. The likelihood of somebody “discovering” one of these blocks is based on the computer they are using compared to all of the computers also generating blocks on the network.

    How divisible are bitcoins?

    Technically, a bitcoin can be divided down to 8 decimals using existing data structures, so 0.00000001 BTC is the smallest amount currently possible. Discussions about and ideas for ways to provide for even smaller quantities of bitcoins may be created in the future if the need for them ever arises.

    How does the halving work when the number gets really small?

    The reward will go from 0.00000001 BTC to 0. Then no more coins will likely be created.

    The calculation is done as a right bitwise shift of a 64-bit signed integer, which means it is divided by 2 and rounded down. The integer is equal to the value in BTC * 100,000,000. This is how all Bitcoin balances/values are stored internally.

    Keep in mind that using current rules this will take nearly 100 years before it becomes an issue and bitcoins may change considerably before that happens.

    How long will it take to generate all the coins?

    The last block that will generate coins will be block #6,929,999. This should be generated around year 2140. Then the total number of coins in circulation will remain static at 20,999,999.9769 BTC.

    Even if the allowed precision is expanded from the current 8 decimals, the total BTC in circulation will always be slightly below 21 million (assuming everything else stays the same). For example, with 16 decimals of precision, the end total would be 20999999.999999999496 BTC.

    If no more coins are going to be generated, will more blocks be created?

    Absolutely! Even before the creation of coins ends, the use of transaction fees will likely make creating new blocks more valuable from the fees than the new coins being created. When coin generation ends, what will sustain the ability to use bitcoins will be these fees entirely. There will be blocks generated after block #6,929,999, assuming that people are still using bitcoins at that time.

    But if no more coins are generated, what happens when bitcoins are lost? Won’t that be a problem?

    Not at all. Because of the law of supply and demand, when fewer bitcoins are available the ones that are left will be in higher demand, and therefore will have a higher value. So when bitcoins are lost, the remaining bitcoins will increase in value to compensate. As the value of bitcoins increase, the number of bitcoins required to purchase an item decreases. This is known as a deflationary economic model.

    If every transaction is broadcast via the network, does Bitcoin scale?

    Yes. With some modifications to the software, Bitcoin nodes could easily keep up with both Visa and Mastercard combined, using only fairly modest hardware (a couple of racks of machines using today’s hardware). It’s worth noting that the Mastercard network is structured somewhat like Bitcoin itself – as a peer-to-peer broadcast network..

    Why do I have to wait 10 minutes before I can spend money I received?

    The reason you have to wait 10 minutes is that’s the average time taken to find a block. It can be significantly more or less time than that depending on luck, 10 minutes is simply the average case.

    Blocks (shown as “confirmations” in the bitcoin client software) are how Bitcoin achieves consensus on who owns what. Once a block is found everyone agrees that you now own those coins, so you can spend them. Until then it’s possible that some network nodes believe otherwise, if somebody is attempting to defraud the system by reversing a transaction. The more confirmations a transaction has, the less risk there is of a reversal. Only 6 blocks or 1 hour is enough to make reversal computationally impractical. This is dramatically better than credit cards which can see chargebacks occur up to three months after the original transaction!

    Why ten minutes specifically? It is a tradeoff chosen by Satoshi between propagation time of new blocks in large networks and the amount of work wasted due to chain splits. If that made no sense to you, don’t worry. Reading the technical paper should make things clearer.

    Do you have to wait 10 minutes in order to buy or sell things with Bitcoin?

    No, it’s reasonable to sell things without waiting for a confirmation as long as the transaction is not of high value.

    When people ask this question they are usually thinking about applications like supermarkets or snack machines. Zero confirmation transactions still show up in the bitcoin client software, but you cannot spend them. You can however reason about the risk involved in assuming you will be able to spend them in future. In general, selling things that are fairly cheap (like snacks, digital downloads etc) for zero confirmations will not pose a problem if you are running a well-connected node.

    Why does my Bitcoin address keep changing?

    Whenever the address listed in “Your address” receives a transaction, Bitcoin replaces it with a new address. This is meant to encourage you to use a new address for every transaction, which enhances anonymity. All of your old addresses are still usable: you can see them in Settings -> Your Receiving Addresses.

    Where does the value of Bitcoin stem from? What backs up Bitcoin?

    Bitcoins have value because they are accepted as payment by many. eg. Bit Munchies, Bitcoin Wear, etc.

    When we say that a currency is backed up by gold, we mean that there’s a promise in place that you can exchange the currency for gold. In a sense, you could say that Bitcoin is “backed up” by the price tags of merchants – a price tag is a promise to exchange goods for a specified amount of currency.

    It’s a common misconception that bitcoins gain their value from the cost of electricity required to generate them. Cost doesn’t equal value hiring 1,000 men to shovel a big hole in the ground may be costly, but not valuable. Also, even though scarcity is a critical requirement for a useful currency, it alone doesn’t make anything valuable. For example, your fingerprints are scarce, but that doesn’t mean they have any exchange value.

    What if someone bought up all the existing bitcoins?

    What if somebody bought up all the gold in the world? Well, by attempting to buy it all, the buyer would just drive the prices up until he runs out of money.

    Not all bitcoins are for sale. Just as with gold, no one can buy a bitcoin that isn’t available for sale.

    What is Bitcoin Mining?

    During mining, your computer runs a cryptographic hashing function (two rounds of SHA256) on what is called a block header. For each new hash, the mining software will use a different number as the random element of the block header, this number is called the nonce. Depending on the nonce and what else is in the block the hashing function will yield a hash which looks like this:

    93ef6f358fbb998c60802496863052290d4c63735b7fe5bdaac821de96a53a9a

    You can look at this hash as a really long number. (It’s a hexadecimal number, meaning the letters A-F are the digits 10-15.) Now to make mining difficult, there is what’s called a difficulty target. To create a valid block your miner has to find a hash that is below the difficulty target. So if for example the difficulty target is 1000000000000000000000000000000000000000000000000000000000000000, any number that starts with a zero would be below the target, e.g.:

    0787a6fd6e0782f7f8058fbef45f5c17fe89086ad4e78a1520d06505acb4522f

    If we lower the target to 0100000000000000000000000000000000000000000000000000000000000000, we now need two zeros in the beginning to be under it:

    00db27957bd0ba06a5af9e6c81226d74312a7028cf9a08fa125e49f15cae4979

    Because the target is such an unwieldy number with tons of digits, people generally use a simpler number to express the current target. This number is called the mining difficulty. The mining difficulty expresses how much harder the current block is to generate compared to the first block. So a difficulty of 70000 means to generate the current block you have to do 70000 times more work than Satoshi had to do generating the first block. Though be fair though, back then mining was a lot slower and less optimized.

    The difficulty changes every 2016 blocks. The network tries to change it such that 2016 blocks at the current global network processing power take about 14 days. That’s why, when the network power rises, the difficulty rises as well.

    Why join a bitcoin mining pool?

    I want to cover why I suggest joining a bitcoin mining pool. The reason is that bitcoins are mined in blocks of 50. You can’t mine just 1 at a time. So unless you have a massive mining machine that does more than 10000 Mh/s (10 Gh/s) , the odds of you actually discovering a block at the current difficulty is extremely low. It actually might never happen. That being said, it can still be done, but it would be an extraordinary lucky occurrence. In a pool, you are working together to discover a block and you will receive a lot of smaller payouts with much more consistency. I recommend the TripleMining bitcoin mining pool. and then pre-order our super bitcoin mining servers.

    ** BitcoinMalaysia.com is owned by admin AT bitcoinmalaysia.com **
    ( sourced above at dailytech post – good explanation by kdoto. )

    ****

    Erik Voorhees had a good write up on Bitcoins (September 26, 2012). Here’s what he said:

    1. What is bitcoin? How long has it been around? How extensively is it used?

    Bitcoin is two things which share a name: 1) a payment system and 2) a currency. You use the Bitcoin payment system to send bitcoins as currency from one account holder to another. The transfer is instantaneous, carries no necessary fee, works anywhere in the world, and is private.

    1) The payment system itself is revolutionary – nothing like it has ever been done. The system is decentralized, so there is no “server farm” or corporate office which controls payments. Transactions occur “peer to peer” just like file-sharing. To use the system, you can either download the client software (which runs on your computer and stores money locally) or you can use an “ewallet” which is a website run by a 3rd party which holds the funds for you (simpler, but introduces counter-party risk if the 3rd party is not trustworthy).

    2) The currency units used on this payment system have a market price, based purely on supply and demand. Currently one bitcoin is worth about $12 USD, and there are a couple dozen exchanges around the world which enable conversion between normal government currencies and bitcoins. The currency unit can be divided to eight decimal places (so you can send someone 0.00000001 bitcoins). There are about 10 million bitcoins currently in existence (as of Sept. 2012) and there will never be more than 21 million in existence. They are released in blocks of 50 bitcoins at a time every ten minutes and this amount gets cut in half every four years (thus creating the limit of 21 million coins).

    How extensively is Bitcoin used? Well, around the world there are somewhere between 100,000 and 1,000,000 users, some of whom use it frequently and some who use it only on occasion. Several million dollars worth are transferred per day, but it is impossible to know for what purpose. In the last 24 hours, about 30,000 transactions occurred, or over one thousand transactions per hour. Since Bitcoins are exchanged back and forth with standard government currencies, the volume of this trading is about $100,000-$500,000 worth per day. Usage is increasing rapidly around the world, a chart of transactions can be found here: http://blockchain.info/charts/n-transactions?showDataPoints=false&timespan=all&show_header=true&daysAverageString=7&scale=0&address= and more basic economic stats can be found here: http://bitcoinwatch.com/

    2. What are the major advantages of bitcoin? How does bitcoin differ from other international payment systems like PayPal?

    Advantages include:

    1. Zero fee to transfer money

    2. Transfers are instant. No holiday or weekend delays.

    3. Works globally, no territory restrictions

    4. Enables the storage and transfer of wealth with zero counter-party risk (ie – you don’t have to trust anyone)

    5. Excellent hedge against monetary debasement (inflation)

    6. Any amount can be sent (perfect for microtransactions under a penny, for example)

    7. Zero chargeback risk (this means, once a merchant receives Bitcoin, there is no risk of a payment reversal or fraud. The funds are immediately “good”)

    8. Ability to move around capital controls (for example, to get money out of China or Argentina)

    9. Anyone can accept and use Bitcoin.

    10. Open-source, continually upgradable. Anyone can adapt and improve the software and build with it.

    How does this differ from PayPal? PayPal doesn’t share any of the above advantages, except perhaps for number 2. It’s important to realize that PayPal is just a payment system for US dollars using the traditional banking infrastructure, while Bitcoin is a payment system for its own currency unit: bitcoins, and is entirely separate from the traditional banking infrastructure.

    3. What are the major liabilities of bitcoin? Is it associated with any major security problems?

    Disadvantages include:

    1. Steep learning curve

    2. Requires personal responsibility (if you delete your wallet without making backups, your money is gone).

    3. Value fluctuates and is relatively volatile (no guarantee that the price tomorrow will be the same as today).

    Regarding security problems – this is an important point. All of the “bitcoin hacks” and security breaches to date have not been against Bitcoin itself, but rather against various companies and individuals who did not secure things properly. Consider a bank that leaves its doors and vault unlocked at night… it will find a theft has occurred in the morning. This doesn’t mean the US dollar was hacked, or that banking as an institution is necessarily at fault, but simply that one specific bank screwed up. The same is true with Bitcoin.

    Frankly, it is very easy to lose your bitcoins if you are foolish, and it is very easy to never lose them if you are smart. The system requires some personal responsibility and due diligence. Because there is no company behind Bitcoin itself, there is no tech support you can call (this is the same with cash or bars of gold – if you lose them, they are gone, and nobody can get them back for you).

    4. Is bitcoin commonly used to facilitate illegal transactions? Is it, as it has been characterized, a currency of crime?

    Bitcoin, like any money, can be used for illegal transactions. Because of its private, secure nature, it is impossible to know the extent to which it is used for such purposes (just like we don’t know how much cash is used for illicit activity, but we all know that it happens).

    Certainly the media has characterized Bitcoin as a “currency of crime”, because A) they don’t understand it and B) crime makes a good news story. Bitcoin is a highly powerful technology (like fire, or automobiles, or the internet itself) and thus it carries risk and danger. It can be used for good or evil – Bitcoin is morally agnostic, it’s just a tool. Now, to be sure, it’s a very good tool , and this means criminals will love to use it, just as good people will love to use it.

    Likely for the foreseeable future, US dollar cash will remain the preferred currency of crime.

    5. Could you speculate on what the future may hold for bitcoin specifically and digital currencies generally?

    First it’s important to recognize that most “digital currencies” are not really digital currencies at all, because they are pegged to standard currencies. Credits in your Paypal account are really just USD-backed; they are not a unique currency themselves. Other “digital currencies” such as Facebook Credits, can be created out of nothing and without limit, so they are not serious money (ironically, the USD is more like Facebook Credits than Bitcoin, because both USD and Facebook Credits can be created out of thin air, whereas Bitcoin cannot be).

    So Bitcoin is the first, what should be called “true” digital currency. It is a scarce, digital commodity with properties that make it perfect for use as money, and so it is used for this purpose.

    As the world starts to realize the benefits of a real digital currency, it will become used in countless ways. It will become as ubiquitous as email (and for the very same reason – email made the cost of written communication near-zero and Bitcoin makes the cost of monetary communication near-zero).

    Really, there is no reason the banks should charge USD $45 to send a “wire transfer” or TT of money between two people. The bank is just changing digital numbers in a digital database – why does it cost $45 and take 3 days? It’s absurd, and Bitcoin finally offers a real alternative. (edited by bitcoinamalaysia admin for clarity)

    Bitcoin is an invention which people will look back upon and say, “wow, that was obviously needed,” just as we look back on the internet today. And, like the internet, Bitcoin will change the way people interact and do business around the world. But, it’s a process that takes years, and it’s only just getting started !

    bitcoin accepted here About

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    Another intro to Bitcoins:

    Forget most things you’ve heard. People discover BitCoin in a variety of ways, but usually pick up some sort of misconception like “BitCoin gives free money to people with computers” or “in order to use BitCoin I have to use a program that wastes electricity for nothing” along the way. Here is a good summary to help you understand BitCoin in general, by focussing on what BitCoin is and what problem it solves. These two things are not typically well explained on most websites, and it is difficult to appreciate just how effective a technology BitCoin is until they are understood.

    What BitCoin is: An agreement amongst a community of people to use 21 million secure mathematical tokens–”bitcoins”–as money, like traditional African and Asian societies used the money cowry. Unlike the money cowry:

    ” there will never be more bitcoins

    ” they are impossible to counterfeit

    ” they can be divided into as small of pieces as you want

    ” and they can be transferred instantly across great distances via a digital connection such as the internet.

    This is accomplished by the use of powerful cryptography many times stronger than that used by banks. Instead of simply being “sent” coins have to be cryptographically signed over from one entity to another, essentially putting a lock and key on each token so that bitcoins can be securely backed up in multiple places, and so that copying doesn’t increase the amount you own.

    Because bitcoins are given their value by the community, they don’t need to be accepted by anyone else or backed by any authority to succeed. They are like a local currency except much, much more effective and local to the whole world. As an example of how effective the community is at “backing” the bitcoin: on April 4th 2011 30,000 bitcoins were abruptly sold on the largest BitCoin exchange, consuming nearly all “buy” offers on the order book and dropping the price by nearly 1/3. But within a couple of days, the price on the exchange had fully rebounded and bitcoins were again trading at good volumes, with large “buy” offers slowly replacing the ones consumed by the trades. The ability of such a small economy (there were only 5 million out of the total 21 million bitcoins circulating then, or about 3.75 million USD worth at then-current exchange rates) to absorb such a large sell-off without crashing shows that bitcoins were already working beautifully.

    What problem BitCoin solves: Mathematically, the specific implementation of the bitcoin protocol solves the problem of “how to do all of the above without trusting anyone”. If that sounds amazing, it should! Normally a local currency has to trust all kinds of people for it to be able to work. So does a national currency. And in both cases, that trust is often abused. But with BitCoin, there’s no one person who can abuse the system. Nobody can print more money, nobody can re-use the coins simply by making a copy, and nobody can use anyone else’s coins without having direct access to their keys. People who break its mathematical “rules” simply end up creating a whole different system incompatible with the first. As long as these rules are followed by someone, the only way BitCoin can fail is for everyone to stop using it.

    This marvelous quality of not having to trust anyone is achieved in two ways. First, through the use of cutting-edge cryptography. Cryptography ensures that only the owner of the bitcoins has the authority to spend them. The cryptography used in BitCoin is so strong that all the world’s online banking would be compromised before BitCoin would be, and it can even be upgraded if that were to start to happen. It’s like if each banknote in your pocket had a 100-digit combination lock on it that couldn’t be removed without destroying the bill itself. BitCoin is that secure.

    But the second way of securing the system, called the blockchain, is where the real magic happens. The blockchain is a single, authoritative record of confirmed transactions which is stored on the peer to peer bitcoin network. Even with top-notch digital encryption, if there was no central registry to show that certain bitcoins had already been “paid” to someone else, you could sign over the same coins to multiple people in what’s called a double-spend attack, like writing cheques for more money than you have in your account. Normally this is prevented by a central authority, the bank, who keeps track of all the cheques you write and makes sure they don’t exceed the amount of money you have. Even so, most people won’t accept a cheque from you unless they really trust you, and the bank has to spend a lot of money physically protecting those central records, whether they are kept in a physical or digital form. Not to mention, sometimes a bank employee can abuse their position of trust. And, in traditional banking, the bank itself doesn’t have to follow the rules you do–it can lend out more money than it actually has.

    The blockchain fixes all these problems by creating a single master registry of the already-cryptographically-secured bitcoin transfers, verifying them and locking them down in a highly competitive market called mining. In return for this critical role, the BitCoin community rewards miners with a set amount of bitcoins per block, taken from the original limited quantity on a pre-agreed schedule. As that original amount gradually runs out, this reward will be replaced by fees paid to prioritise one transaction over another–again in a highly competitive market to ensure the lowest possible cost. The transactions are verified and locked in by the computational work of mining in a very special way so that no one else can change the official record of transactions without doing more computational work than the cumulative work of all miners across the whole network.

    In conclusion: All this mathematical technology may be a bit of a mouthful, but what it means in practice is that BitCoin works just like cash. Bitcoin transactions are intentionally irreversible–unlike credit cards or PayPal where chargebacks can invalidate a payment that has already been made. And there are no middlemen. Transactions are completed directly between the sender and the receiver via the peer to peer network.

    Because of BitCoin’s intricate design, the network remains secure no matter where or how you process bitcoin transactions. Which is incredible–no one else has ever tried to create a system that worked this way! All previous monetary systems have relied on trusting somebody, whether it was the king, town hall, the federal reserve, or banks. BitCoin doesn’t. It’s guaranteed instead by the laws of mathematics, and that’s why it has everyone from technologists to economists very excited. I’m sure you have lots more questions, so scan the index below to see if they’ve been asked before, then dive in! The so-called “canonical” threads linked from this index are considered newbie-friendly zones; outside of them you’re welcome to try your own luck.

    Apa Itu Bitcoin ?

    Bitcoin adalah matawang digital yang digunakan di internet dan sistem pembayaran digital yang pantas. Ia boleh dihantar dari satu individu kepada individu lain melalui website di internet tanpa melalui bank (seperti p2p) . Ini bermakna kos penghantaran wang adalah lebih mudah, cepat dan murah.

    Matawang digital tunggal ini boleh digunakan di seluruh dunia oleh sesiapa saja tanpa perlu tertakluk kepada sebarang jenis matawang dunia. Matawang ini juga tidak boleh dibekukan kerana ia tidak melalui mana-mana bank.

    Bagaimana Bitcoin Bermula ?

    Matawang ini dicipta oleh seorang yang hanya dikenali dengan nama Satoshi Nakamoto yang dipercayai berbangsa Jepun. Ada yang menyatakan Satoshi Nakamoto adalah satu watak yang tidak wujud sebenarnya. Watak ini diwujudkan untuk melindungi individu atau kumpulan sebenar yang mewujudkan matawang ini.

    Bagaimana Mendapatkan Bitcoin ?

    Bitcoin ini boleh dicipta melalui satu aplikasi yang dipanggil Bitcoin Miner. Dengan membuat ‘kerja’ di situ anda akan diberikan Bitcoin. Kerja bermaksud membuat aktiviti teknikal yang memakan masa.

    Bagaimana Bitcoin disimpan ?

    Bitcoin disimpan dalam Bitcoin Wallet, website seperti bank online atau paypal yang biasa anda gunakan. Anda juga boleh gunakan Bitcoin Wallet ini untuk menghantar dan menerima duit. Penghantaran dan penerimaan adalah berdasarkan kepada alamat email dan password anda.

    Apa Yang Boleh Dibeli dengan Bitcoin ?

    Kebanyakkan kedai-kedai online di internet sudah mula untuk menerima pembayaran melalui Bitcoin. Buat masa ini anda boleh membeli games, t-shirt, alat musik, alat mainan, ebook dan jutaan barangan lain.

    Berapa Nilaian Bitcoin ?

    Nilai Bitcoin buat masa ini belum lagi stabil. Ia pernah turun serendah USD 2 dan pernah naik setinggi USD 6. Harga semasa Bitcoin adalah USD 14.00 (RM53). Trend semasa menunjukkan matawang ini akan menjadi stabil dalam tempoh masa beberapa tahun lagi.

    Persoalan paling utama di sini, Adakah Bitcoin bakal mengubah kewangan dunia sepertimana internet / email mengubah industri penerbitan ?