Bitcoin is a peer-to-peer version of electronic cash, allowing online payments to be sent directly from one party to another without going through a trusted third party or a financial institution. The digital e-currency is built as an open system, not being fully controlled by any government, or bank who can put restrictions on it. This means the currency is not created or distributed by a central authority. Instead, bitcoin mining is used to distribute the initial coins of this new currency. You can earn bitcoins with your CPU: The power used to run the CPU with a combination of software and network technologies is your investment or expenditure to earn initial coins.

 

Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into the public ledger, called mining. Individuals or companies engage in this activity in exchange for transaction fees and newly created bitcoins. Besides mining new bitcoins, bitcoins can be obtained in exchange for fiat money, products, and services. Users can send and receive bitcoins electronically for an optional transaction fee using wallet software on a personal computer, mobile device, or a web application.

 

The conventional third party based electronic payment is weak in avoiding fraudulent transactions made by sellers and buyers accose the internet.  In fact a complete non-reversible transaction is not really possible with the conventional system, and therefore people could easily change, alter and rewrite the cash transactions, resulting in fraud and dispute.

 

Bitcoin provides a new approach to electronic payments. Payments are based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a central repository or a single administrator. Bitcoin transactions once held are computationally impractical to reverse or change. It would protect sellers and buyers from fraud. 

 

Bitcoin as a form of payment for products and services has seen growth, and merchants have an incentive to accept the digital currency because fees are lower than the 2-3% typically imposed by credit card processors. The European Banking Authority has warned that bitcoin lacks consumer protections. Unlike credit cards, any fees are paid by the purchaser not the vendor. Bitcoins can be stolen and chargebacks are impossible. The US is considered bitcoin-friendly compared to other governments. Commercial use of bitcoin is currently small compared to its use by speculators, which has fueled price volatility.

 

As the first decentralized peer-to-peer payment network, powered by its users with no central authority or middlemen, bitcoin has revolutionized both the modern day concept of money and commerce. Bitcoin is the most amazing technological development since the wheel. It is unlike anything the world has seen before.

 

For more information on Bitcoin visit:   http://en.wikipedia.org/wiki/Bitcoin

                                                                https://bitcoin.org/en/

 

 

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