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IBTimes UKRead the original here:
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Read More..This is a question that often causes confusion. Here's a quick explanation!
As a new user, you can get started with Bitcoin without understanding the technical details. Once you have installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose your addresses to your friends so that they can pay you or vice versa. In fact, this is pretty similar to how email works, except that Bitcoin addresses should only be used once.
The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.
A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining.
Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.
This is only a very short and concise summary of the system. If you want to get into the details, you can read the original paper that describes the system's design, and explore the Bitcoin wiki.
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How does Bitcoin work? - Bitcoin
Read More..Bitcoin proponents want to make sure they have a say in how Washington ultimately regulates the virtual currency.
WASHINGTON (CNNMoney)
Bitcoin companies are hiring lobbyists, visiting lawmakers on Capitol Hill and writing to agencies about how they should write rules that will determine the future of the fast-growing virtual currency.
It's all part of a push to shape how Washington ultimately regulates the independent, digital money that is growing in popularity.
"The most important thing we're doing is explaining how Bitcoin works," said Jim Harper, a lobbyist who was hired recently as counsel for the Bitcoin Foundation, an organization that represents Bitcoin companies and investors. Harper, who has lobbied for PayPal and VeriSign, is paid in bitcoin.
The timing is ripe.
Just two weeks ago, the Internal Revenue Service issued a rule to tax bitcoin as property. The Federal Election Commission is also expected in the next several weeks to decide whether people can contribute to political campaigns using bitcoin. Another federal agency, the Commodity Futures Trading Commission, is expected to rule whether Bitcoin is a traded commodity, like gold or interest rates.
All of this comes as Bitcoin is under increased scrutiny. On Tuesday, Attorney General Eric Holder told lawmakers during a Congressional testimony that Bitcoin and other virtual currencies pose a challenge for law enforcement agencies, because they can be used to conceal illegal activity.
"A lot of different government officials and federal agencies are trying to wrap their mind around Bitcoin," said Harper, the lobbyist.
Those in the Bitcoin world certainly don't want to be caught by surprise with any new federal rules.
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Bitcoin players knock on Washington doors
Read More..Creating a market for my coin intrigued me, so I dusted off my Econ 101 book. Buried in one chapter was a reference to Friedrich Hayek's book, "The Denationalization of Money," in which he advocated for the creation of privately-issued currencies. Hayek theorized that people would gravitate to the most stable currency and, in a flash of brilliance or insanity, I had my answer create my very own central bank! If I could create the currency, I would be able to sell it on a digital-currency exchange and use the proceeds to place buy orders for the coin. I thought that by creating buy orders and slowly selling coins, I could establish a stable growth pattern. Through stability, I thought I would attract users just as Hayek surmised.
I went back to Coigen and created another coin called Nautiluscoin (www.nautiluscoin.com), so named because a nautilus grows at a steady, stable rate. The next step was listing on an exchange where I could sell my newly-minted coins and place my buy orders. I contacted Austin Global Exchange (www.agx.io) and within days, Nautiluscoin was ready to begin trading.
Read MoreBitcoin: The future of M&A deals?
However, since my last foray with BKoin, the mining technology had far outpaced the software and my new coin was vulnerable. During the due diligence process, the team at AGX found a flaw in my coin which would allow miners with powerful computers to hoard all my coins. After contacting a coin developer, I found out that fixing my coin would require a significant investment of time and money. Since the project began as a way to learn, I decided that the best use of Nautiluscoin was education.
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How I created my own bitcoin-like currency
Read More..Creating a market for my coin intrigued me, so I dusted off my Econ 101 book. Buried in one chapter was a reference to Friedrich Hayek's book, "The Denationalization of Money," in which he advocated for the creation of privately-issued currencies. Hayek theorized that people would gravitate to the most stable currency and, in a flash of brilliance or insanity, I had my answer create my very own central bank! If I could create the currency, I would be able to sell it on a digital-currency exchange and use the proceeds to place buy orders for the coin. I thought that by creating buy orders and slowly selling coins, I could establish a stable growth pattern. Through stability, I thought I would attract users just as Hayek surmised.
I went back to Coigen and created another coin called Nautiluscoin (www.nautiluscoin.com), so named because a nautilus grows at a steady, stable rate. The next step was listing on an exchange where I could sell my newly-minted coins and place my buy orders. I contacted Austin Global Exchange (www.agx.io) and within days, Nautiluscoin was ready to begin trading.
Read MoreBitcoin: The future of M&A deals?
However, since my last foray with BKoin, the mining technology had far outpaced the software and my new coin was vulnerable. During the due diligence process, the team at AGX found a flaw in my coin which would allow miners with powerful computers to hoard all my coins. After contacting a coin developer, I found out that fixing my coin would require a significant investment of time and money. Since the project began as a way to learn, I decided that the best use of Nautiluscoin was education.
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Chinese Bitcoin exchanges said domestic banks closed their accounts after the nations central bank barred financial institutions from handling transactions in the virtual currency to curb risk.
BtcTrade said on its website yesterday that an Agricultural Bank of China Ltd. (601288) sub-branch in Hangzhou will close its account by April 15 if it continues to use it for Bitcoin-related settlement services. Huobi.com said Industrial & Commercial Bank of China Ltd. will close its account by April 18 and Btc100.org said it received a notice from an unidentified lender to cancel its account.
The account closings come after the Peoples Bank of China in December banned financial institutions and payment companies from buying and selling Bitcoin or dealing in linked products. The ban reflects concern about the risk the digital currency may pose to Chinas capital controls and financial stability after trading surged, according to exchange operator BTC China.
The PBOC ordered lenders and payment companies to close the trading accounts of more than 10 domestic Bitcoin exchange platforms, Caixin reported on March 27, citing a notice from the central bank. Accounts must be shut by April 15, preventing investors in the digital currency from transferring funds to the exchanges, according to the report.
The central bank will keep watching risks from Bitcoin, which is fundamentally not a currency but an investment target, Sheng Songcheng, head of the monetary authoritys statistics department, told reporters in Beijing on Jan. 15.
To contact the Bloomberg News staff on this story: Zhang Dingmin in Beijing at dzhang14@bloomberg.net
To contact the reporter on this story: Zhang Dingmin in Beijing at dzhang14@bloomberg.net To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net Joshua Fellman, James Callan
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Chinas Bitcoin Exchanges Say Banks Will Close Their Accounts
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