BITCOIN ARE THE NEW E-MARKETING CURRENCY   

The Bitcon is just a set of mathematical formulas. The bitcoin was founded by a group of mathematicians on February 4, 2009, nicknamed Satoshi Nakamoto.

It all started in 1970 when he wanted to make a decentralized currency. The researchers worked hard for it, thought thousand methods, algorithms, also thought about the security for the purpose of not being able to cheat. 

In 2008, Satoshi Nakamoto posted the Bitcoin protocol. From that moment, it was not necessary to use any centralized currency to purchase online. Bitcoin was the solution.

Bitcoin is a new kind of global payment network. Like MasterCard or Paypal, it allows money to be transmitted electronically. But Bitcoin is different from these conventional payment networks in two important ways.

First, the Bitcoin network is fully decentralized. The MasterCard network is owned and operated by MasterCard Inc. But there is no Bitcoin Inc. Instead, thousands of computers around the world process Bitcoin transactions in a peer-to-peer fashion.

Second, MasterCard and PayPal payments are based on conventional currencies such as the US dollar. In contrast, the Bitcoin network has its own unit of value, which is called the bitcoin. The value of one bitcoin fluctuates against other currencies in the same way the euro’s value fluctuates against the dollar. In January 2015, one bitcoin is worth around $300, and all bitcoins in existence are worth around $4 billion.

Why are geeks excited about a new payment network?

Bitcoin doesn’t have very much to offer ordinary users right now. But many technologists believe that Bitcoin could be the foundation for innovative financial software and services in the future. That’s because Bitcoin is the world’s first truly open financial network. MasterCard and PayPal place limits on who can build applications using their platforms and what those applications can do. 

The Bitcoin network has no such limitations. This openness could lead to a fast pace of innovation in the coming years. The internet provides a good point of comparison. In the 1980s, the internet was complicated and clunky with limited functionality. But the internet was an open platform. And, over time, innovators used that platform to build new products with broader and broader consumer appeal.

What will people be able to do with Bitcoin that they can’t do with conventional financial systems?

It’s hard to predict what path future innovations might take. But here are a few examples to illustrate the kinds of applications that might make Bitcoin useful.

One is international money transfers. Right now, companies like Western Union and MoneyGram charge fees as high as 8 percent to send money from one country to another, and it can take as long as three business days for transactions to clear. New Bitcoin-based entrants could easily compete on price and speed.


Bitcoin could also enable improvements in payment security. The conventional credit card network essentially works on the honor system, with fraud-detection happening after the fact. Bitcoin could serve as the foundation for payment systems that deal with fraud in a more sophisticated way. 

For example, a Bitcoin-based payment app could ask the user to approve a transaction on his or her smartphone before it goes through.

Finally, Bitcoin could be a lifesaver for people in developing countries with dysfunctional banking systems. The conventional banking system is geographically segregated, with people in each country expected to use that country’s banking system. But the Bitcoin network is global.

So consumers in low-income countries who are worried that local banks will mismanage their funds could use Bitcoin-based financial services in a developed country such as Canada, Switzerland, or South Korea.

Bitcoin: What You Need to Know Before Investing...

The Bitcoin system would be convenient, untraceable, and completely independent from government or bank oversight.

One of the biggest challenges of designing a digital currency involves the "double-spending" problem. If you are dealing with pure information, free from any physical object, people can simply copy and paste text or code and spend their currency asmany times as they want if there are no controls.

The conventional answer used by banks and financial institutions is to use central clearinghouse to keep a real-time ledger of all transactions. The ledger and authorization systems they use prevent fraud, but also require a trusted third party to administer them.

That is something Bitcoin was designed to circumvent through a peer-to-peer system. By publicly distributing the ledger, called the "block chain," ledgers can be compared by everyone using the system to avoid any illicit modifications or entries.

This requires quite a bit of computer power and resources running a special piece of software. To reward the users (called miners), anyone running the software also generates new currency.

Transactions are sent to the whole network, and computers running the software would compete to solve irreversible cryptographic puzzles that contain data from several transactions.

The first miner to solve each puzzle is awarded 25 newly minted Bitcoins, and the associated block of transactions would be added to the chain. Nakamoto himself mined the first 50 Bitcoins on January 3, 2009. Slowly, the idea spread beyond the obscure cryptography circles into the mainstream.

The small band of early bitcoiners all worked to support this open source project. A computer coder bought 10,000 Bitcoins for $50, created a web site called the Bitcoin Faucet and gave them away just to spread them around.

A Florida programmer conducted what bitcoiners think of as the first real-world Bitcoin transaction, paying 10,000 Bitcoins to get two pizzas delivered from Papa John's. He had to transfer the Bitcoins to someone in the UK, who then placed a credit card order over the phone.

At recent exchange rates between Bitcoins and U.S. dollars, $10 million was given away online, and Papa John's sold the most expensive pair of pizzas at $5 million each.

The software has evolved over the years and become more and more robust. The Lead developer for the project is now Gavin Andresen, the same man who gave away 10,000 Bitcoins. Satoshi Nakamoto has disappeared from the scene entirely. One of his last messages was to Andresen, who said, "Satoshi did suggest this morning that I (we) should try to de-emphasize the whole 'mysterious founder' thing when talking publicly about Bitcoin."

The system he built is, and really has been since its inception, in the hands of the entire Bitcoin community. It is what the people make of it, without any one founder or overly influential person.

At the time of publishing, there are now around 12 million Bitcoins in circulation worth about $12 billion.

Spending them is still extremely easy. Bitcoin was built with eight decimal points, making the smallest unit of Bitcoin tracked by the system worth about a thousandth of a cent at today's value.

Mining Bitcoins

At this point, you're probably thinking the best way to get Bitcoins is just to fire up your computer, run the mining program overnight and wait for them to roll in.

Unfortunately, it really isn't that easy. Competition amongst miners is fierce and the cryptographic number problems are amazingly complex. To control the production and release of new Bitcoins into the system, the difficulty of each puzzle increases as the number of miners increase. 

By carefully crafting how the evolution of the increasingly complex and massively long cryptographic problems progress, the system limits the creation of blocks of transactions — and thus a new batch of Bitcoins — to roughly one every 10 minutes.

The amount of Bitcoins given to a miner is cut in half every 210,000 blocks. It started at 50 Bitcoins. Now it is at 25. Next time it is halved, the reward will be 12.5 Bitcoins. This will continue all the way through 2140, when the system reaches its absolute limit of 21 million Bitcoins.

To create a block and earn a Bitcoin reward for it, your computer will have to generate a 256-bit 16 digit hexadecimal number that is below a set target. Instead of using the standard 0 to 9 numbers, a hexadecimal number uses 0 to 9 along with the letters A through F.

The chances of having a standard computer guess this number is so small that scientific notation is normally used for anything similar. The last time I looked, your odds are 0.000000000000000000329.

To put this into perspective, your odds of winning a Powerball lottery jackpot are 0.00000000571, or over 1.7 billion times better than the odds of you getting the right answer for a block of Bitcoins.

Keep in mind that Bitcoin rewards go out every ten minutes while there are only two Powerball drawings per week and many times no one wins. That means someone out there 'wins the Bitcoin lottery' — so to speak — 100,798 more times week at a minimum, not that it helps your odds much at all.

The reason for such a massive disparity is the sheer number of miners and the vast differences between the computers being used by high tech miners and the lowly desktop in your office.

Competition to build high-end, parallel computing "mining rigs" is extremely intense. There are now entire buildings filled with systems dedicated to mining Bitcoins. The capital required to build, power, and maintain these systems is astronomical.

These private Bitcoin miners are notoriously secretive about their systems and finances. The Bitcoin ledger is public information though, and most estimates put the profit margin for these operations around 10%.

Smaller miners have resorted to pooling resources together online and sharing any Bitcoins they earn as a result. It takes thousands to compete with the big players though, and the payoff is heavily diluted if your pool gets a block. Most estimates suggest you'll lose money just from the electricity your home computer uses to participate.

It is possible to hit the jackpot and get all 25 Bitcoins on your own, but in reality it would take years or decades, if it happened at all.

Now for the simple explanation: Bitcoin is a lot like gold.

Of course, there are a whole lot of differences, but on some key points they are very similar.
First, there is a finite amount we can bring into the market. For gold, there is a set amount in the ground. For Bitcoin, the absolute limit is 21 million. No one can create anything identical to them, although with gold you might be able to fool someone with a fake coin.

Second, as more of them go into circulation, it becomes harder and harder to bring more into the market.

Gold mines are depleted. The easiest and purest deposits are stripped bare first and the work is quick. The next one will be deeper in the ground and harder to refine. At a certain point, prices can't support the extraction of more.

For Bitcoin, over half of the finite amount is already in circulation. The equations that need to be solved by your computer are far more complex than they have been, and are only getting worse.

Third, fighting over dwindling resources has made competition fierce enough to price potential miners out of the market.

For gold, the days of heading to California to pan in a stream are long since gone. Your average person can't bring new gold into the market, andeven companies with tens or hundreds of millions of dollars struggle to finance a gold mine.

The same goes for Bitcoin mining. The days when you could mine them on your home computer are long since gone. Building a specialized supercomputer is far beyond the average person.

Yet people will continue to mine gold and Bitcoins when it is economically viable. If they drop too far in value, miners will stop. This bottoms out any decline in value and supports higher prices long-term.

If demand is high, like it is now, people will mine as much as they can and pay far more to do it, just as we saw for gold several years ago and Bitcoins today.

Evolution of Value

Through 2009 and early 2010, Bitcoins had no actual value. The project was still in its infancy and there were no transactions taking place.
•In the first six months after Bitcoin trading commenced in April 2010, the value stayed below $0.14.
•In summer 2010, Bitcoins started gaining traction. With a limited supply and new-found demand, value started moving up...
•By early November, it hit $0.36 before settling down to around $0.29.
•In February 2011, it rose again and hit "dollar parity;" it hit $1.06 before settling in at roughly $0.87.
•In April through May of 2012, exposure through a Forbes story on the new currency pushed prices up from $0.86 to $8.89.
•In June 2012, it tripled to about $27.

As exposure and popularity amongst Bitcoin buyers and merchants ramped up, production remained limited to the preset algorithm. The growing number of people buying Bitcoins to hold and not spend created some sharp spikes in the going rate in the market.

Here is a chart of the exchange rate between Bitcoins and the U.S. dollar. When demand soars but no one is selling, a spike forms, followed by a return to the baseline as demand subsides.

However, there is now a strong reason for Bitcoin to maintain value. They are being adopted as a form of payment worldwide, creating a real value to customers and merchants alike.

There are tens of thousands of businesses accepting them. A man in Canada recently listed his home on the market in dollars and Bitcoins.

There are even ATM's that will exchange Bitcoins for your cash on the spot. On October 30, 2013, the first machine went live. On its 29th day, it had already logged over 1 million Canadian dollars worth of transactions.

The co-founder of a company that produces these ATMs has said: "We are optimistic that we will see our machines in all continents by the end of the year."

A web site that tracks user-submitted reports of physical stores that accept Bitcoins called Coinmap.org saw an 81% surge in listings last November alone. As of now, there are 4,767 locations and counting.

Bitcoin is even starting to see serious consideration by widely respected figures in the financial world. David Woo, FX and Rates Strategist at Bank of America/Merill Lynch and a very gifted analyst had this to say: "We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers. As a medium of exchange, Bitcoin has clear potential for growth, in our 
view."

Even Ben Bernanke weighed in through a letter to a Senate committee, stating that Bitcoin "may hold long-term promise" and is keeping a very open mind towards digital currencies.

To justify valuation at $1,300 per Bitcoin, David woo stated Bitcoin will have to:
•Account for at least 10% of all global e-commerce business to customer transactions
•Become one of the top three players in the money transfer industry (like credit card companies)
•Acquire a store of value reputation close to silver.

The rapid adoption of Bitcoin, the lower processing costs for merchants using Bitcoin compared to traditional card providers, and the decentralized and vastly superior encrypted ledger are putting Bitcoin right on the cusp of all three conditions.

What You Need To Get Started

Capitalizing on the advantages of a government-proof and bank-proof currency also means you need to take full responsibility for some of the work and security governments and banks provide for traditional currencies.

Bitcoin is easy to use once you get the hang of it, but it does require some work, knowledge and new habits.

First, you will have to decide how you want to purchase Bitcoins. Some people prefer to buy them in person by meeting a seller and handing over cash. By doing this, you assume some risks, just as you would by meeting up with someone to buy something off of Craigslist or from an ad in the back of a newspaper.

Before you meet in person, you will also have to set up a digital wallet. This wallet is a collection password-protected data that includes a public and a private key.
The public key is used as an address to which others can send bitcoins. Anyone wishing to use Bitcoin can create one or more Bitcoin addresses.

The private key is used to decrypt and access the public key. Securing and protecting your private key is absolutely essential. If the private key for an address is not kept secret, the Bitcoins may be stolen.

Another option is a "paper wallet." This is a method of generating a very similar wallet that does not store the encrypted private key online or on your computer. You print out the information and store it somewhere secure.

This allows you to avoid any issues with a compromised or hacked account, but if you lose the paper record, your bitcoins are irretrievable.

If you choose to purchase Bitcoins through one of the many online exchanges, you will have to set up an account with them. This will often create a digital wallet for you.

If you want to use a different digital wallet or paper wallet after you get your Bitcoins, you can easily transfer once the transaction is complete. In fact, this is often a good idea considering this information is going to be stored by the online exchange.

Going through a web site exchange will require entering your bank account information, or your credit or debit card details.
Most web sites will require bank account information at first. Bitcoin transfers are irreversible, but credit and debit transactions can be reversed. You will have to make several purchases before online exchanges will start to trust you with a potential way to buy bitcoins while reversing your payment.

Linking bank account information can be risky, so you may want to check with your bank to see if you can create a second checking account just for your Bitcoin funds. If you do this and the account information is compromised, there will be no way to tap the funds in your primary account.

Some Bitcoin exchanges will accept money orders or cashier checks through the mail as well. There aren't many and once you mail it the money is gone, but it speeds up the Bitcoin transaction and doesn't require any of your sensitive account details.

Once you have made your Bitcoin purchase, you may want to set up multiple wallets to spread out your Bitcoins and minimize the risk of a catastrophic loss. Whatever you do, keep an exhaustive list of your wallet information and Bitcoin balances, either printed out with no saved copies on your computer, or handwritten. The best place to store this is in a fire-proof safe. 

Continuing Coverage

With the unprecedented and disruptive nature of Bitcoin for the entrenched status quo of fiat national currencies...

My advise is start to earn and use BitCoin in your business. You are welcome to join some affiliate program my first tip are at
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YOU HAVE SEEN & HEARD THE UPS and DOWNS ABOUT BITCOIN and The Other DIGITAL CURRENCY...

At our page "Bitcoin Currency" you find the accurate information!

 

 Learn more: What are Crypto Currencies?
A digital currency relying on the principles of cryptography

The Wiki describes it well; a cryptocurrency (such as Bitcoin, Litecoin, Feathercoin, etc.) is a peer-to-peer, decentralized, digital currency whose implementation relies on the principles of cryptography to validate the transactions and generation of the currency itself.

A crypto currency is a peer-to-peer, decentralized, digital currency whose implementation relies on the principles of cryptography to validate the transactions and generation of the currency itself. See more on on our page "Bitcoin Currency."

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