What is Bitcoin?

What is Bitcoin?

Bitcoin is a cryptocurrency(It is a currency associated with the internet that uses cryptography, the process of converting legible information into an almost uncrackable code, to track purchases and transfers.), or a digital currency, that uses rules of cryptography for regulation and generation 

of units of currency. Bitcoin falls under the scope of cryptocurrency and was the first and most valuable among them. It is commonly called a decentralised digital currency. 

History of Bitcoin.

On 18 August 2008, the domain name bitcoin.org was registered.Later that year on 31 October, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash Systemwas posted to a cryptography mailing list.This paper detailed methods of using a peer-to-peer network to generate what was described as "a system for electronic transactions without relying on trust".In January 2009, the bitcoin network came into existence with the release of the first open source bitcoin client and the issuance of the first bitcoins,with Satoshi Nakamoto mining the first block of bitcoins ever (known as the genesis block), which had a reward of 50 bitcoins.

How to Invest in Bitcoins ?

Bitcoin Minning ::

Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain, and also the means through which new bitcoin are released.  Anyone with access to the internet and suitable hardware can participate in mining.  The mining process involves compiling recent transactions into blocks and trying to solve a computationally difficult puzzle.  The participant who first solves the puzzle gets to place the next block on the block chain and claim the rewards.  The rewards, which incentivize mining, are both the transaction fees associated with the transactions compiled in the block as well as newly released bitcoin.

                          The amount of new bitcoin released with each mined block is called the block reward.  The block reward is halved every 210,000 blocks, or roughly every 4 years.  The block reward started at 50 in 2009, is now 25 in 2014, and will continue to decrease.  This diminishing block reward will result in a total release of bitcoin that approaches 21 million.  , mining was done with CPUs from normal desktop computers.  Graphics cards, or graphics processing units (GPUs), are more effective at mining than CPUs and as Bitcoin gained popularity, GPUs became dominant.  Eventually, hardware known as an ASIC, which stands for Application-Specific Integrated Circuit, was designed specifically for mining bitcoin.  The first ones were released in 2013 and have been improved upon since, with more efficient designs coming to market.  Mining is competitive and today can only be done profitably with the latest ASICs.  When using CPUs, GPUs, or even the older ASICs, the cost of energy consumption is greater than the revenue generated.

Investing in Bitcoins ::

In India, you can purchase Bitcoin from Zebpay exchange. Zebpay has Android and iPhone app which lets you link your bank account for quick transfers.You can buy Bitcoins by making a payment to Zebpay's bank account. You can also withdraw the money to your bank account, and track data on Bitcoin valuation in the country.
There is a KYC requirement and you need to verify your ID by simply clicking a photo of your PAN card.Unocoin, another India-based exchange, lets you trade Bitcoins. They can help you buy, sell, store, use and accept bitcoin.The company claims it has over 1,50,000 customers.

                 You can buy fractions up to the eighth decimal place of bitcoin. That means you don’t need to plunk down the nearly $17,000 you often see quoted as the price for a full bitcoin — which is probably for the best, as we noted above. As of Thursday afternoon, that one ten-thousandth — four decimal places or 0.0001 — of a bitcoin is worth about $1.65.