What are BitCoins? BitCoin is a virtual currency that has grown in infamy over the years – as it’s usually used for illegal activities. This is because BitCoin transactions can be processed anonymously. This is why Ransomware such as CryptoWall will ask for payment via BitCoin. It is also used on websites offering services like Fake ID’s or Investment opportunities. These Investment sites will often tell you that you can double your money in a day. There are even sites set up, such as www.badbitcoin.org, to help you avoid these scams.
So, if this currency is so dodgy, why do people still use it?
Well, Bitcoin is a unique currency. It’s entirely digital money that solves lots of issues with physical money.
International payments, for example, or paying by cheque. These things take time and often aren’t processed for days. With BitCoin, you can pay instantaneously, or within minutes. Credit card payments can be made instantly too, but often there’s a fee, unlike when using BitCoin.
You’re also much safer when using BitCoins from Keystroke logging malware. Unlike online card transactions, using BitCoin doesn’t require you to enter any sensitive data. Instead, it uses two keys – a public key and a private key. Your public key is like an address that everyone can see, but your private key is secret. When you send a bitcoin, your transaction is validated by combining your public and private keys together, and then applying a mathematical function to them. This creates a unique certificate for your transaction and this cannot be used again – so as long as you don’t enter your private key anywhere, you’re safe from fraud.
You also have complete control. In a traditional banking system, you need to trust a bank, and you might have to trust a third-party too, like PayPal or WorldPay. You’ll often have to trust the seller as well. Each of these require sensitive information from you. On the other hand, BitCoin is completely decentralised, so you don’t need to trust anyone else. When you send a transaction, it is digitally signed, and secure and then the transaction is completed. The seller doesn’t even have to know who you are.
How much is a BitCoin worth?
As you can see from the image above, ฿1 is the equivalent to a whopping £154.08. As you can see in the graph, at one stage it was up to nearly £750 back in 2014, but has declined recently since it has grown in infamy.
A Norwegian man famously bought 5,000 BitCoins back in 2009, for a total of £17.50, and had forgotten about them. When he checked in 2013, they were worth £575,000. More and more stories like this began hitting the news and investors began buying BitCoins simply for trading purposes.
Aside from the actual value of the currency, According to MIT, Bitcoin’s real promise is not the currency. It’s the technology under the bonnet, which could revolutionise the way we keep records digitally. It may well replace traditional ways of tracking data such as contracts and even online voting. The technology, which utlises thousands of computers in a network, uses ‘Cryptographic’ techniques to create a permanent and public record of every single Bitcoin transaction ever. This is called the ‘Blockchain’, and investors seem to think that this technology may be incredibly valuable in things other than tracking payments.
If you’re interested in hearing more about the latest technology news and gossip, take a look at some of our other blog, including: Top 3 Android Phones of 2015 and See What Extensions are Slowing your Browser Down.