Bitcoin
Bitcoin (₿) is a cryptocurrency and worldwide payment system.[7]:3 It is the first decentralized digital currency, as the system works without a central bank or single administrator.[7]:1[8] The system was designed to work as a peer-to-peer network, a network in which transactions take place between users directly, without an intermediary.[7]:4,5 These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto[9] and released as open-source software in 2009.[10]
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies,[11] products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.[12] Research produced by the University of Cambridge estimates that in 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.[13]
Price manipulation investigation
Consumer advocates have long warned investors about the dangers of putting their money into digital currencies, but the first major official investigation was reported in May 2018.[14] Trading in bitcoin is under investigation by the U.S. Justice Department for possible price manipulation, possibly including the techniques of spoofing and wash trades.[15][16][17] Traders in the U.S., the U.K, South Korea, and possibly other countries are being investigated.[14]Academic research published in the Journal of Monetary Economics concluded that price manipulation occurred during the Mt Gox bitcoin theft and that the market remains vulnerable to manipulation.[18]
Etymology
The word bitcoin first occurred and was defined in the white paper[4] that was published on 31 October 2008.[19] It is a compound of the words bit and coin.[20] The white paper frequently uses the shorter coin.[4]There is no uniform convention for bitcoin capitalization. Some sources use Bitcoin, capitalized, to refer to the technology and network and bitcoin, lowercase, to refer to the unit of account.[21] The Wall Street Journal,[22] The Chronicle of Higher Education,[23] and the Oxford English Dictionary[20] advocate use of lowercase bitcoin in all cases, a convention followed throughout this article.
Units
The unit of account of the bitcoin system is a bitcoin. Ticker symbols used to represent bitcoin are BTC[a] and XBT.[b] Small amounts of bitcoin used as alternative units are millibitcoin (mBTC), and satoshi (sat). Named in homage to bitcoin's creator, a satoshi is the smallest amount within bitcoin representing 0.00000001 bitcoins, one hundred millionth of a bitcoin.[2] A millibitcoin equals 0.001 bitcoins, one thousandth of a bitcoin or 100,000 satoshis.[27]Symbol
The Unicode character for bitcoin is ₿.[28]:2 This was standardized in version 10.0 in June 2017. As with most new symbols, font support is very limited. Typefaces supporting it include Horta.History
On 18 August 2008, the domain name "bitcoin.org" was registered.[29] In November that year, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System[4] was posted to a cryptography mailing list.[29] Nakamoto implemented the bitcoin software as open source code and released it in January 2009 on SourceForge.[30][31][10] The identity of Nakamoto remains unknown.[9]In January 2009, the bitcoin network came into existence after Satoshi Nakamoto mined the first ever block on the chain, known as the genesis block.[32][33] Embedded in the coinbase of this block was the following text:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.[10]This note has been interpreted as both a timestamp of the genesis date and a derisive comment on the instability caused by fractional-reserve banking.[34]:18
The receiver of the first bitcoin transaction was cypherpunk Hal Finney, who created the first reusable proof-of-work system (RPOW) in 2004.[35] Finney downloaded the bitcoin software the day it was released, and received 10 bitcoins from Nakamoto.[36][37] Other early cypherpunk supporters were Wei Dai, creator of bitcoin predecessor b-money, and Nick Szabo, creator of bitcoin predecessor bit gold.[38]
In the early days, Nakamoto is estimated to have mined 1 million bitcoins.[39] In 2010, Nakamoto handed the network alert key and control of the Bitcoin Core code repository over to Gavin Andresen, who later became lead developer at the Bitcoin Foundation.[40] Nakamoto subsequently disappeared from any involvement in bitcoin.[41] Andresen stated he then sought to decentralize control, saying: "As soon as Satoshi stepped back and threw the project onto my shoulders, one of the first things I did was try to decentralize that. So, if I get hit by a bus, it would be clear that the project would go on."[41] This left opportunity for controversy to develop over the future development path of bitcoin.[42]
Forks
On 1 August 2017, a hard fork of bitcoin was created, known as Bitcoin Cash.[43] Bitcoin Cash has a larger block size limit and had an identical blockchain at the time of fork. On 24 October 2017 another hard fork, Bitcoin Gold, was created. Bitcoin Gold changes the proof-of-work algorithm used in mining.[44]From : wikipedia about bitcoin.
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