Bitcoin is the new age digital currency introduced in the year 2009. It uses the blockchain method which hinders the role of a third party, that is, it’s self-governing and the first decentralised way of payment system. It is an open source network of chains, to be precise. Bitcoin is mystical and hence has garnered a lot of publicity worldwide. No one knows where it came from, where does it actually exists or where it is going, for that matter! There are no intermediaries or a sole person responsible. It works on a peer-to-peer network, in which the transactions take place directly between the two unknown users, without the involvement of a third party. The bitcoin currency is said to be invented by, alias, Satoshi Nakamoto.
Bitcoins, also known as virtual currency, is basically a computer programmed file. It is generally stored in a ‘digital wallet’ app on any smart-phone or computer. To engage in bitcoin earning and spending, one sends this digital cash to others across the Internet. Every single transaction is saved in a ledger called the blockchain. This global money system involves the mathematical field of cryptography to ensure bitcoin’s security.
How can one procure bitcoins?
Although bitcoins are not conferred as legal tender, they are still soaring high in the online marketing forums in exchange of services. You can obtain bitcoins by buying them from a close ally (in cash), or accepting them in return of goods and services (online). Once you have a bitcoin wallet, then you can use the traditional mode of payment that incorporates credit card transactions, bank transfer or debit card to buy bitcoins on a bitcoin exchange. This way bitcoins will be added to your digital wallet.
What is the unit of bitcoins?
The unit of account of the digital cryptocurrency bitcoin is bitcoin. Symbols used to denote bitcoins are BTC and XBT. Smaller denominations of bitcoin used as alternative units are millibitcoin (mBTC), and satoshi (sat). Satoshi, the alias name of the inventor is denoted as the smallest amount representing one hundred millionth of a bitcoin.
Is it legal to buy bitcoins?
Bitcoin being of decentralized nature, that is, no involvement of intermediary bodies like the State or the banks, no Country can pronounce it as illegal. It is an open source online wallet and hence its policies and terms are independent and cannot be altered or tampered. Having said that, the use of bitcoin can be criminalised in case of unlawful transaction, drug-dealing or fraudulent gambling is involved. The legitimate status of bitcoins varies substantially from country to country. In many countries, given the digital stature, it remains undetermined as legal or illegal. Some countries have explicitly allowed the use of bitcoins in their economy, while others have restricted or put a ban on it.
How many Bitcoins are there in the world?
There are a total of 21 million bitcoins that can be mined, as per the data base. Once all these bitcoins are tapped out, bitcoin will need to modify its protocol to meet to the sprouting needs.
Is bitcoin taxable?
Bitcoins are not physical money to be liable to be taxed. The IRS (Internal Revenue System) does not recognize bitcoins as legal tenders and hence it is exempted from being taxed.