Bitcoin: The virtual currency built on math, hope and hype

virtualcurencybitcoin18 Dec 2013 / PC World – The ascent this year of Bitcoin, a virtual currency forged through hardcore mathematics and buoyed by promises of financial liberation from banks, has been nothing short of mesmerizing.

It is being increasingly embraced as a viable means of exchange and a valuable investment, free from meddling by central banks and what some view as untrustworthy financial systems.

A pseudonymous programmer calling himself Satoshi Nakamoto developed the Bitcoin system, releasing a white paper in 2008. The network, launched in early 2009, uses peer-to-peer software to transfer bitcoins.

A purely digital currency, a bitcoin is essentially a secret number that is transferred from one party to another using public key cryptography. “Miners,” or people running high-end computers that verify the transactions, are awarded newly minted bitcoins for their efforts.

Sticking it to The Man

Bitcoins distance from the established financial system and lack of regulation so far is partly what has made it attractive. Virtual currency projects have largely failed over the years, but Bitcoin has so far defied predictions it would meet the same fate.

Bitcoin “seems to resonate quite deeply” with people who dont trust banks, even if the rosy predictions of its potential are baseless in standard economic theory, said Dick Bryan, a professor with the Department of Political Economy at the University of Sydney…… Read more

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