Wishesh magazine january 2018 Wishesh magazine january 2018 | Page 42

COVER STORY
they’ll go up in value. Bitcoins
are created as a reward for
a process known as mining.
They can be exchanged for
other currencies, products,
and services. As of February
2015, over 100,000
merchants and vendors
accepted bitcoin as payment
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Bitcoin is an open-source,
peer-to-peer, digital
decentralized cryptocurrency.
Powered by the Blockchain
technology, its defining
characteristic is its
decentralization, i.e. the lack
of central governing authority,
such as a central bank or a
ministry of finance. Bitcoin’s
issuance and circulation are
ensured by regular users via
a process known as “Bitcoin
mining”. Bitcoin can be sent
anywhere, anytime, (almost)
for free, and with little regard
for national borders or
government/bank-imposed
restrictions.
How to acquire
bitcoins:
Buy on an Exchange
Many marketplaces called
“bitcoin exchanges” allow
people to buy or sell bitcoins
using different currencies.
Coinbase is a leading
exchange, along with
Bitstamp and Bitfinex. But
security can be a concern:
bitcoins worth tens of millions
WWW.WISHESH.COM | JANUARY 2018
of dollars were stolen from
Bitfinex when it was hacked in
2016.
Transfers
People can send bitcoins to
each other using mobile apps
or their computers. It’s similar to
sending cash digitally.
Mining
People compete to “mine”
bitcoins using computers to
solve complex math puzzles.
This is how bitcoins are created.
Currently, a winner is rewarded
with 12.5 bitcoins roughly every
10 minutes.
How to own
bitcoins:
Bitcoins are stored in a “digital
wallet,” which exists either in the
cloud or on a user’s computer.
The wallet is a kind of virtual
bank account that allows users
to send or receive bitcoins, pay
for goods or save their money.
Unlike bank accounts, bitcoin
wallets are not insured by the
FDIC.
Wallet in cloud: Servers have
been hacked. Companies have
fled with clients’ Bitcoins.
Wallet on computer: You can
accidentally delete them.
Viruses could destroy them.
Bitcoin ensures
anonymity:
Though each bitcoin
transaction is recorded
in a public log, names of
buyers and sellers are
never revealed – only their
wallet IDs. While that keeps
bitcoin users’ transactions
private, it also lets them
buy or sell anything without
easily tracing it back to them.
That’s why it has become the
currency of choice for people
online buying drugs or other
illicit activities
Bitcoin in year
2017:
It goes without saying that
2017 was the year of bitcoin.
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