Bitcoin (? ) is a cryptocurrency payment system and worldwide. This is the first decentralized digital currency, because the system works without a central bank or a single administrator. The system functions as a peer-to-peer network, where transactions occur between users directly, without intermediaries. This transaction is verified by network nodes through cryptography and recorded in a publicly distributed ledger called blockchain. Bitcoin was created by an unknown person or group of people using the name Satoshi Nakamoto and released as open source software in 2009.
Bitcoin is made as a reward for a process known as mining. They can be exchanged for currency, products, and other services. In February 2015, more than 100,000 merchants and vendors received bitcoin as payment. Research produced by the University of Cambridge estimates that by 2017, there are 2.9 to 5.8 million unique users using cryptocurrency purses, mostly using bitcoins.
Video Bitcoin
Etymology
The word bitcoin was first used and defined in a white paper published on October 31, 2008. It is a combination of the words bit and coin . White paper often uses shorter coins.
There is no uniform convention for capitalizing bitcoin . Some sources use Bitcoin , capitalized, to refer to technologies and networks and bitcoin , lowercase letters, to refer to account units. The Wall Street Journal , The Chronicle of Higher Education , and the Oxford English Dictionary advocates the use of lowercase bitcoin case, a convention follows this entire article.
Unit
The bitcoin system account unit is bitcoin . The ticker symbols used to represent bitcoins are BTC and XBT. A small amount of bitcoin used as an alternative unit is millibitcoin (mBTC), and satoshi (sat). Named as a tribute to the creator of bitcoin, a satoshi is the smallest amount in the bitcoin representing 0.00000001 bitcoin, one hundredth of a million bitcoin. millibitcoin is equal to 0.001 bitcoin, one thousandth of a bitcoin or 100,000 satoshi.
Symbol
Unicode character for bitcoin is? This is standardized in version 10.0 in June 2017. Like most new symbols, font support is very limited. Typography that supports it includes Horta.
Maps Bitcoin
History
On August 18, 2008, the domain name "bitcoin.org" was registered. In November of that year, a link to a paper by Satoshi Nakamoto entitled Bitcoin: The Peer-to-Peer Electronic Cash System has been posted to the cryptographic mailing list. Nakamoto implemented bitcoin software as open source code and released it in January 2009 at SourceForge. Nakamoto's identity is still unknown.
In January 2009, the bitcoin network appeared after Satoshi Nakamoto mine the first block on the chain, known as the genesis block. Embedded in this block coinbase is the following text:
The Times 03/Jan/2009 Chancellor on the verge of a second bailout for the bank.
This record has been interpreted as a timestamp from the date of genesis and comments mocking instability caused by fractional reserve banking.
The recipient of the first bitcoin transaction was cypherpunk Hal Finney, who created a reusable proof-of-work system (RPOW) in 2004. Finney downloaded bitcoin software on the day it was released, and received 10 bitcoins from Nakamoto. Other early cypherpunk supporters are Wei Dai, creator of the bitcoin predecessor b-money , and Nick Szabo, creator of the bitcoin precursor bit gold .
In the early days, Nakamoto was estimated to have mined 1 million bitcoins. In 2010, Nakamoto handed over network warning locks and Bitcoin Core code storage controls to Gavin Andresen, who later became the main developer at Bitcoin Foundation. Nakamoto then disappears from any involvement in bitcoin. Andresen said he was trying 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 it, so if I got hit by the bus it would be clear that the project would continue. "This opportunity leaves the controversy to develop a bitcoin development path in the future.
Altcoin
During the history of bitcoin there are several spin offs that have lived in separate blockchains. This has been known as altcoins , short for alternative coins, because bitcoin is the first blockchain-based cryptocurrency and this is a derivative of it. This spin off takes place so new ideas can be tested, when the scope of the idea is beyond bitcoin, or when the community is split about merging those changes.
One early altcoin was Litecoin, which began in October 2011. Since then, there have been many altcoins made because interest in cryptocurrency has increased.
Fork
On August 1, 2017, a bitcoin hard fork was made, known as Bitcoin Cash. Bitcoin Cash has a larger block size limit and has an identical blockchain at the time of the fork. On October 24, 2017 another hard fork, Bitcoin Gold, was created. Bitcoin Gold alters the proof-of-work algorithm used in mining.
Scaling Debates
When the dispute over bitcoin scaling heats up, some hard forks are proposed. Bitcoin XT is one proposal aimed at 24 transactions per second. To achieve this, it is proposed to increase the block size from 1 megabyte to 8 megabytes. When Bitcoin XT declines, some community members still want the block size to increase. In response, a group of developers launched Bitcoin Classic, which is intended to increase the block size to just 2 megabytes. Bitcoin Unlimited set itself apart by allowing miners to decide on the size of their blocks, with nodes and miners limiting the size of blocks they receive, up to 16 megabytes.
Segwit Soft-fork
Bitcoin Core developer Peter Wuille presented the Segregated Witness idea (SegWit) at the end of 2015. Simply put, SegWit is a backward compatible rear fork that aims to reduce the size of every bitcoin transaction, allowing more transactions to occur at once. Segwit is enabled on August 1, 2017.
In response to SegWit, some developers and users decide to start a hard fork to avoid updating the protocol it generates. Bitcoin Cash is the result, which increases the block size to 8 megabytes. However, there is another hard fork called Segwit2x, which will increase the block size to 2 megabytes. After a number of companies and individuals in the community decided to withdraw from the hard fork, the team behind SegWit2x canceled their hard work plan in November 2017.
New Features
Bitcoin Gold is a hard fork that followed a few months later in October 2017 that changed the work-proof algorithm with the aim of restoring mining functionality to the basic graphics processing unit (GPU), as the developer feels that mining has become too special. Bitcoin Private, launched in March 2018, adds the ability to keep certain private details in a transaction, in contrast to bitcoins that have a transparent transaction history.
Design
Blockchain
blockchain is a general ledger that records bitcoin transactions. This is implemented as a block chain, each block containing hashes from the previous block to block genesis from the chain. The new solution resolves this without a trusted central authority: blockchain maintenance is performed by a network of communication nodes running bitcoin software. Transactions in the form of payer X send Y bitcoin to payee Z are broadcast to this network using available software applications. A network node can validate transactions, add them to a copy of the ledger, and then broadcast these additional ledgers to another node. Blockchain is a distributed database - to achieve independent verification of the chain of ownership of each bitcoin, each network node stores its own blockchain copy. Approximately once every 10 minutes, a new group of transactions received, a block, created, added to the blockchain, and quickly published to all nodes. This allows bitcoin software to determine when a certain amount of bitcoin has been removed, which is necessary to prevent multiple expenditures in an environment without central supervision. While conventional ledgers note actual bill transfer or existing promissory notes, blockchain is the only place bitcoin can be said to exist in the form of unused transaction output.
Transactions
Transactions are defined using a similar scripting language. : ch. 5 Transactions consist of one or more input and one or more output . When a user sends a bitcoin, the user points each address and the number of bitcoins sent to that address in an output. To prevent multiple expenses, each input should refer to the previous unused output in blockchain. Use of multiple inputs in accordance with the use of multiple coins in cash transactions. Because a transaction can have multiple outputs, the user can send bitcoins to multiple recipients in a single transaction. As in cash transactions, the number of inputs (coins used to pay) may exceed the intended amount of payments. In such cases, additional output is used, returning the change back to the payer. Each satoshi input is not taken into account in transaction output to transaction cost.
Transaction fee
Paying a transaction fee is optional. Miners can choose which transactions will be processed, and they are given an incentive to prioritize those who pay higher fees.
Because the size of the mined block is restricted by the network, the miners choose the transaction based on the fees paid relative to their storage size, not the absolute amount of money paid as a cost. Thus, costs are generally measured in satoshi per byte , or sat/b . The size of the transaction depends on the number of inputs used to make the transaction, and the amount of output.
Ownership
In blockchain, bitcoins are registered to bitcoin addresses. Creating a bitcoin address is nothing more than selecting a random random private key and calculating the corresponding bitcoin address. This calculation can be done in seconds. But instead (computing the private key of the given bitcoin address) is mathematically impossible and the user can notify others and announce the bitcoin address without sacrificing the privacy key. Additionally, the number of valid private keys is so wide that it is highly unlikely that a person will calculate a key pair that is already in use and has funds. The number of legit private keys makes it impossible for gross forces to be used for it. To be able to spend bitcoin, the owner must know the corresponding private key and digitally sign the transaction. Network verifies signatures using public key.
If the private key is lost, the bitcoin network will not recognize other proof of ownership; the coins were then unusable, and effectively lost. For example, in 2013 one user claimed to have lost 7,500 bitcoins, valued at $ 7.5 million at the time, when he accidentally dumped a hard drive containing his private key. Its key backup (s) will prevent this.
Mine
Mining is a record keeping service performed through the use of computer processing power. Miners keep the blockchain consistent, complete, and irreversible by repeatedly grouping newly broadcast transactions into blocks , which are then broadcast to the network and verified by the receiving node. Each block contains the SHA-256 cryptographic hash of the previous block, so connect it to the previous block and give the blockchain its name.
In order to be accepted by the entire network, the new block must contain so-called proof-of-work (PoW). The system used is based on the Adam Back 1997 anti-spam scheme, Hashcash. PoW requires miners to find a number called nonce , so that when the block content is hashed together with nonce, the result is numerically smaller than the target network difficulty . This proof is easy for every node in the network to verify, but it is very time consuming to generate, as for cryptographic hash safely, miners should try many different nonce values ​​(usually the order of values ​​being tested is natural number rises: 0, 1, 2, 3 ,...) before meeting the target difficulty.
Every 2,016 blocks (about 14 days at about 10 minutes per block), the target difficulty is adjusted based on recent network performance, with the aim of keeping the average time between new blocks in ten minutes. In this way the system automatically adjusts to the total amount of mining power in the network. Between March 1, 2014 and March 1, 2015, the average number of miners to try before making new blocks increased from 16.4 trillion to 200.5 trillion.
The proof-of-work system, in addition to a series of blocks, makes modifications from blockchain very hard, as the attacker has to modify all the next blocks for a one-block modification to be received. Since new blocks are mined over time, the difficulty of modifying blocks increases with time and the next number of blocks (also called confirmation of the given block) increases.
Pool Pooled excavation
The power of computing is often combined or "collected" to reduce the difference in the miner's income. Individual mining rigs often have to wait long to confirm the block of transactions and receive payment. In the pond, all participating miners are paid each time a participating server breaks blocks. This payment depends on the amount of work borne by individual miners to help locate the block.
Supply
Miners who managed to find new blocks were rewarded with bitcoins and newly created transaction costs. On July 9, 2016, the prize amounted to 12.5 new bitcoins made per block added to the blockchain. To claim a gift, a special transaction called coinbase is included with the payment processed. All existing bitcoins have been created in the coinbase transaction. The bitcoin protocol specifies that the reward for adding blocks will be halved every 210,000 blocks (approximately every four years). Finally, the reward will drop to zero, and the limit of 21 million bitcoin will be achieved c. 2140; Recording then will be rewarded with transaction costs alone.
In other words, the inventor of bitcoin, Nakamoto, establishes a monetary policy based on artificial scarcity at the beginning of bitcoin that there will be only a total of 21 million bitcoins. Their number is released approximately every ten minutes and the rate at which they are generated will fall by half every four years until all is circulated.
Wallet
A wallet stores the information needed to transact the bitcoin. While the wallet is often described as a place to store or store bitcoins, due to the nature of the system, bitcoins can not be separated from the blockchain transaction ledger. A better way to describe a wallet is something that "stores digital credentials for your bitcoin holdings" and allows one to access (and spend it). Bitcoin uses public key cryptography, in which two cryptographic keys, one public and one private, are generated. Basically, the wallet is a collection of these keys.
There are three modes in which the wallet can operate. They have an inverse relationship with respect to trust and computing requirements.
- Full Client verifies the transaction directly by downloading a full copy of the blockchain (more than 150Ã, GB In January 2018). They are the most secure and reliable way to use the network, because trust on external parties is not necessary. Full clients check the validity of the mined blocks, preventing them from transacting on the offending chain or changing the network rules. Due to its size and complexity, downloading and verifying the entire blockchain is not suitable for all computing devices.
- Light clients consult with full clients to send and receive transactions without requiring local copies of all blockchain (see simplified payment verification - SPV). This makes the lighter clients faster to manage and allows them to be used on low-power, low-bandwidth devices such as smartphones. When using a lightweight wallet, users must trust the server to a certain degree, because it can report incorrect values ​​back to the user. Lightweight clients follow the longest blockchain and do not ensure valid, requiring confidence in miners.
Third party internet services called online wallets offer similar functionality but may be easier to use. In this case, the credentials to access the funds are stored with the online wallet provider rather than on the user's hardware. As a result, the user must have full confidence in the provider of the wallet. A malicious provider or a server security breach may cause a bitcoin that is trusted to be stolen. Examples of such security breaches occur with Mt. Gox in 2011. This causes a repeated meme "Not your key, not your bitcoin".
Physical wallet stores offline credentials needed to spend bitcoins. One notable example is a novelty coin with these credentials printed on the reverse side. Wallpaper is just a printed paper.
Another type of wallet called the hardware wallet keeps the credentials offline while facilitating transactions.
Implementations
The first purse program - dubbed "Bitcoin" - was released in 2009 by Satoshi Nakamoto as an open-source code. In version 0.5 the client moved from the wxWidgets user interface toolkit to Qt, and the entire file is called "Bitcoin-Qt". After the release of version 0.9, the software bundle was named "Bitcoin Core" to distinguish itself from the underlying network. Sometimes referred to as "Satoshi client".
While decentralized systems can not have "official" implementations, Bitcoin Core is considered by some to be the preferred implementation of bitcoin. Today, other alternative clients (forks from Bitcoin Core) exist, such as Bitcoin XT, Bitcoin Unlimited, and Parity Bitcoin.
Decentralization
Bitcoin is designed not to require central authority and bitcoin networks are considered to be decentralized. However, researchers have shown a "tendency toward centralization" seen by miners joining large mining pools to minimize the variance of their income. According to researchers, other parts of the ecosystem are also "controlled by a small group of entities", especially online wallets and simplified payment verification clients (SPV).
Because transactions on the network are confirmed by miners, network decentralization requires that no single miner or mining acquire 51% of the hashing power, which will allow them to spend coins, preventing certain transactions from being verified and preventing other miners from earning. In 2013, only six mines control 75% of all bitcoin hashing power.
In 2014 Ghash.io mining gained 51% hashing power which caused significant controversy about network security. The pool voluntarily has closed their hashing strength at 39.99% and asked the other pool to act responsibly for the benefit of the entire network.
Privacy
Bitcoin is a pseudonymous, which means that funds are not tied to real-world entities but bitcoin addresses. Bitcoin address owners are not explicitly identified, but all transactions in blockchain are public. In addition, transactions may be associated with individuals and companies through an idiom of use (for example, transactions that spend coins from multiple inputs indicate that inputs may have the same owner) and corroborate public transaction data with known information about the owner of a particular address. In addition, the exchange of bitcoin, in which bitcoin is traded for traditional currency, may be required by law to collect personal information.
To improve financial privacy, a new bitcoin address can be created for each transaction. For example, a hierarchical deterministic wallet produces pseudorandom "rolling addresses" for each transaction of a single seed, while requiring only one passphrase to be remembered to recover all corresponding private keys. Researchers at Stanford University and Concordia University have also shown that exchange of bitcoins and other entities can prove their assets, liabilities, and solvency without revealing their addresses using evidence of zero knowledge. "Bulletproof," a version of the Secret Transaction proposed by Greg Maxwell, has been tested by Professor Dan Boneh of Stanford. Other solutions such as Abk of Merkelized Syntax Tree (MAST), pay-for-script-hash (P2SH) with MERKLE-BRANCH-VERIFICATION, and "Execution Execution of Tail Call", have also been proposed to support smart personal contracts.
Fungibility
Wallets and similar software technically handle all the same bitcoins, build a basic level of fungibility. Researchers have shown that the history of each bitcoin is listed and publicly available in the ledger blockchain, and that some users may refuse to accept bitcoin derived from controversial transactions, which would jeopardize the fungibility of bitcoin.
Scalability
Blocks in the blockchain were initially limited to 32 megabytes in size. The one-megabyte block size limit was introduced by Satoshi Nakamoto in 2010, as an anti-spam measure. Finally, the block limit of one megabyte block creates problems for transaction processing, such as increasing transaction costs and pending transaction processing.
On August 24, 2017 (on block 481,824), Segregated Witness (SegWit) performed. The transaction contains some data that is used only to verify the transaction, and does not affect the movement of the coin. SegWit introduces a new transaction format that moves this data into new fields in a backwards compatible manner. Separate data, called witness , are not sent to non-SegWit nodes and therefore do not form part of the blockchain as seen by inherited nodes. This decreases the average transaction size in the node view, increasing the block size without causing hard forks implied by other proposals to increase block size. Thus, per computer scientist Jochen Hoenicke, actual block capacity depends on the SegWit transaction ratio on the block, and at the ratio of the signature data. By estimate, if the SegWit transaction ratio is 50%, the block capacity may be 1.25 megabytes. According to Hoenicke, if the original SegWit address of Bitcoin Core version 0.16.0 is used, and the adoption of SegWit reaches 90 to 95%, block size up to 1.8 megabytes is possible.
Economy
Classification
Bitcoin is a digital asset created by Satoshi Nakamoto that serves as a currency. Commonly referred to as digital currency, digital money, virtual currency, electronic currency, or cryptocurrency.
Whether bitcoin is a currency or not is still debatable. Bitcoin has three useful qualities in currency, according to The Economist in January 2015: "difficult to produce, limited in supply and easily verified". Economists define money as a store of value, exchange, and unit of account and agree that bitcoin has several ways to meet all of these criteria. It's best as a medium of exchange; as of February 2015 more than 100,000 merchants received bitcoin. In March 2014, bitcoin markets suffered from volatility, limiting the ability of bitcoin to act as a stable value store, and retailers receiving bitcoin using other currencies as the main unit of their account.
General use
According to a study by Cambridge University, between 2.9 million and 5.8 million unique users used the cryptocurrency purse in 2017, mostly for bitcoin. The number of users has increased significantly since 2013, when there are 300,000 to 1.3 million users.
Reception by merchant
By 2015, the number of merchants receiving bitcoin exceeds 100,000. Instead of 2-3% typically charged by credit card processors, merchants who receive bitcoin often pay a fee below 2%, down to 0%. Companies that receive payments in bitcoins per December 2014 include PayPal, Microsoft, Dell, and Newegg. By 2017, bitcoin acceptance among major online retailers includes three of the top 500 online merchants, down from five by 2016. The reasons for this fall include high transaction costs due to bitcoin scalability issues, long transaction times and increased value making consumers do not want to spend it. In November 2017, PwC received bitcoin at its Hong Kong office in exchange for consulting services to local firms specializing in blockchain and cryptocurrency technology, the first time the Big Four accounting firm received cryptocurrency as payment.
Payment service provider
Traders who receive bitcoin typically use bitcoin payment service providers such as BitPay or Coinbase. When a customer pays with bitcoin, the payment service provider receives a bitcoin on behalf of the merchant, converts it to local currency, and sends the amount earned to the merchant bank account, charging for the service.
Financial institutions
Bitcoin can be bought in the digital currency exchange. According to Tony Gallippi, co-founder of BitPay, "banks are afraid of dealing with bitcoin companies, even though they really want to". In 2014, National Australia Bank closes business accounts with bonds with bitcoin, and HSBC refuses to serve hedge funds with links to bitcoins. Australian banks have generally been reported as closing bank accounts of business actors involving currencies; this has been the subject of investigation by the Australian Competition and Consumer Commission. Nonetheless, Australian banks have conducted trade trials between each other using blockchain technology where bitcoin is based.
In a 2013 report, Bank of America Merrill Lynch stated that "we believe bitcoin can be a key payment tool for e-commerce and can emerge as a serious competitor to traditional money transfer providers." In June 2014, the first bank to convert deposits in direct currency to bitcoin at no cost whatsoever opened in Boston.
The plan is announced to include the bitcoin futures option at the Chicago Mercantile Exchange in 2017. The bitcoin futures trade is due to start on December 10, 2017.
As an investment
Some Argentineans have bought bitcoins to protect their savings against high inflation or the possibility that the government may seize a savings account. During the 2012-2013 Cyprus financial crisis, bitcoin purchases in Cyprus increased due to concerns that savings accounts would be confiscated or taxed.
The Winklevoss twins have invested in bitcoin. In 2013 The Washington Post claimed that they had 1% of all the bitcoins present at the time.
Another method of investment is bitcoin funding. The first organized bitcoin fund was set up in Jersey in July 2014 and approved by Jersey Financial Services Commission. Forbes started publishing arguments in favor of investment in December 2015.
In 2013 and 2014, the European Banking Authority and the Financial Industry Regulatory Authority (FINRA), the US self-financing organization, warned that investing in bitcoins carries a significant risk. Forbes calls bitcoin the best investment of 2013. In 2014, Bloomberg named bitcoin as one of the worst investments of the year. By 2015, bitcoin tops the Bloomberg currency table.
According to bitinfocharts.com, by 2017 there are 9,272 bitcoin purses with more than $ 1 million bitcoin. The exact number of bitcoin millionaires is uncertain because one person can have more than one bitcoin purse.
Business capital
Venture capitalists, such as Peter Thiel's Founders Fund, which invests US $ 3 million in BitPay, do not buy bitcoins themselves, but fund bitcoin infrastructure that provides payment systems for merchants, exchange, wallet services, etc. In 2012, the incubator for focused start-up bitcoin was set up by Adam Draper, with the help of funding from his father, venture capitalist Tim Draper, one of the largest bitcoin holders after winning the 30,000 bitcoin auction, at the time called the 'mysterious buyer'. The company's goal is to fund 100 bitcoin businesses in 2-3 years with $ 10,000 to $ 20,000 for a 6% stake. Investors also invest in bitcoin mining. According to a 2015 study by Paolo Tasca, bitcoin startup raised nearly $ 1 billion in three years (Q1 2012 - Q1 2015).
Price and volatility
Bitcoin prices have gone through a cycle of appreciation and depreciation that some people call bubbles and sculptures. In 2011, the value of one bitcoin quickly rose from about US $ 0.30 to US $ 32 before returning to US $ 2. In the second half of 2012 and during the 2012-13 Cyprus financial crisis, bitcoin prices began to increase, reaching a high US $ 266 on April 10, 2013, before falling around US $ 50. On November 29, 2013, the cost of one bitcoin rose to a peak of US $ 1,242. In 2014, prices fell sharply, and in April remain depressed at slightly more than half the price in 2013. In August 2014 it was under US $ 600.
According to Mark T. Williams, by 2014, bitcoin has seven times greater volatility than gold, eight times larger than S & amp; P 500, and 18 times greater than the US dollar. According to Forbes, for some use volatility is not a problem, such as online gambling, tipping, and international remittances.
An article in The Wall Street Journal, on April 19, 2016, notes that bitcoin has been more stable than gold for 24 days previously, and suggests that its value may be more stable in the future. On March 3, 2017, bitcoin prices surpassed the one-ounce gold market for the first time and the price jumped to an all-time high of $ 1,268. A study in Electronic Trade Research and Applications goes back through the historical data of the network and shows the value of bitcoin tissue as measured by bitcoin prices, roughly proportional to the square of the daily number of unique users who participate in the network, ie that the network is "sufficient well modeled by Metcalfe's law ".
Legal statuses, taxes and regulations
Due to the nature of the bitcoin decentralization, the nation-state can not shut down the network or change its technical rules. However, the use of bitcoin can be criminalized, and closing peer-to-peer exchanges and economies in a country will be a "de facto ban". The legal status of bitcoin varies greatly from country to country and is still undefined or changed in many of them. While some countries have explicitly authorized their use and trade, others have banned or forbidden it. The rules and restrictions applicable to bitcoin may extend to similar cryptocurrency systems.
Criticism
Ponzi scheme and pyramid scheme problem
Various journalists, economists and central banks of Estonia have voiced fears that bitcoin is a Ponzi scheme. In 2013, Eric Posner, a law professor at the University of Chicago, stated that "a real Ponzi scheme takes fraud; bitcoin, on the contrary, seems more like collective delusion." A 2014 report by the World Bank concludes that bitcoin is not a deliberate Ponzi scheme. The Swiss Federal Council examines concerns that bitcoin may be a pyramid scheme; he concludes that "Since in the case of bitcoin, typical promises about less profit, it can not be assumed that bitcoin is a pyramid scheme." In July 2017, billionaire Howard Marks called bitcoin a pyramid scheme.
On September 12, 2017, Jamie Dimon, CEO of JP Morgan Chase, called bitcoin a "scam" and said he would fire anyone in his caught company to trade it. Zero Hedge claims that on the same day Dimon made his statement, JP Morgan also bought a large amount of bitcoin for his clients. In an interview in January 2018, Dimon voiced remorse about his earlier statement, saying "Blockchain is real You can have cryptodollar in the yen and stuff like that... ICO... you have to see everyone individually."
Speculative bubble dispute
Bitcoin has been labeled speculative bubbles by many including former Fed Chairman Alan Greenspan and economist John Quiggin. Nobel Memorial Prize recipient Robert Shiller says that bitcoin "shows many characteristics of speculative bubbles". Journalist Matthew Boesler in 2013 rejected the speculative bubble label and saw a rapid rise in bitcoin prices as nothing more than normal economic power at work. Timothy B. Lee, in a piece of 2013 for The Washington Post shows that the observed observation and depreciation cycles do not match the definition of speculative bubbles. On March 14, 2014, renowned American businessman Warren Buffett said, "Stay away from it.This is a fantasy, basically." During their time as bitcoin developers, Gavin Andresen and Mike Hearn warned that bubbles could occur.
Energy consumption
Bitcoin has been criticized for the amount of electricity consumed by the mines. In 2015, The Economist estimates that even if all miners use modern facilities, combined electricity consumption would be 166.7 megawatts (1.46 terawatt-hours per year). By the end of 2017, global bitcoin mining activity is estimated to be between 1 to 4 gigawatts of electricity. Politico notes that the banking sector currently consumes about 6% of the total global strength, and even if the bitcoin consumption rate increases 100-fold from the current level, bitcoin consumption will still only account for about 2% of global power consumption.
To lower costs, bitcoin miners have been set up in places like Iceland where geothermal energy is cheap and Arctic air cooling is free. Bitcoin miners are known to use hydroelectric power in Tibet, Quebec, Washington (state), and Austria to reduce electricity costs. Miners are attracted to suppliers like Hydro Quebec who have an energy surplus. According to the Cambridge University study, many bitcoin mining is done in China, where electricity is subsidized by the government.
Investigation price manipulation
The first major official investigation into bitcoin traders was reported in May 2018. The US Department of Justice launched a possible investigation of price manipulation, including spoofing and laundry trading techniques. Merchants in the US, UK, South Korea, and possibly other countries are under investigation. Brett Redfearn, head of the Trade and Markets Division of the US Commission and Stock Exchange, has identified several manipulation techniques of concern in March 2018. State and provincial securities managers, coordinated through the North American Securities Associate Association, are investigating "bitcoin fraud" and ICO in 40 jurisdictions. The academic research published in the Journal of Monetary Economics concludes that price manipulation occurs during the stealing of Mt Gox bitcoin and that the market remains vulnerable to manipulation. Hacking, fraud, and theft history involving bitcoin back to at least 2011.
Criminal activity
The use of bitcoin by criminals has attracted the attention of financial regulators, legislatures, law enforcers, and the media. In the United States, the FBI prepares intelligence assessment, the SEC issued a sharp warning about investment schemes using virtual currency, and the US Senate held a trial on virtual currency in November 2013.
Some news outlets have confirmed that the popularity of bitcoin depends on the ability to use it to purchase illegal goods. In 2014, researchers at the University of Kentucky found "strong evidence that computer programming enthusiasts and illegal activity encouraged interest in bitcoin, and found limited or no support for political and investment motives".
Documentation
Academics
In September 2015, the founding of the peer-reviewed academic journal Ledger (ISSN 2379-5980) was announced. This will include the study of cryptocurrency and related technologies, and published by the University of Pittsburgh.
The journal encourages authors to digitally sign hash files from submitted papers, which will then be timed captured into blockchain bitcoin. Authors are also asked to enter a personal bitcoin address on the first page of their paper.
Movies
The documentary, The Rise and Rise of Bitcoin (end of 2014), features interviews with people using bitcoins, such as computer programmers and drug dealers.
See also
Note
References
External links
- The Bitcoin Project
- Bitcoin node statistics
- Daily transaction bitcoin network
Source of the article : Wikipedia
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