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Understanding bitcoins

Bitcoins is a virtual or digital means of currency exchange and

payment for goods and services.It uses a cryptographic means of

validation to make transactions.



HISTORY

'''''''''''''''''

It was established in 2008 but only gained popularity during the

recession crisis in USA and Eurozone in 2012.Was approved by congress

late this year.



Security

'''''''''''''''''

The users own wallets which contain their public identity known as

adresses.The wallets are protected by both public and private keys.A

public key is open to the public whereas private key is secret and

owned by the owner of the wallet.The private key protects users info

and access by hackers to their accounts.Its accountability has been

questioned as many users have lost their money through the private

keys. This prompted analysts to suggest,paper private keys as the

safest means in transacting instead of using a personal computer.



Apart from providing wallets to clients ,it has miners who operate

computers from decentralized locations to prevent users from double

spending (a means of copying and sending same bitcoins a number of

times).These miners are then awarded bitcoins after for verifying

transactions in a complex cryptography.



Market

''''''''''''''

The value of bitcoins has been flactuating over time making it a

volatile financial payment system.The uncertainty of bitcoins has made

it difficult for its penetration in the markets.China for example has

not implemented the use of bitcoin in banks as a means of payment.Ony

USA has accepted it as a viable means of payment.



Last week, the chief executive of bitcoin said that the company was

not worrried about its instability as the value moved from $1100 to

$600 with economist forecasting the same trend in the next coming

years.



Emerging news

''''''''''''''''''''''''''''''''

The company has been facing challenges over uncertainty of virtual

currency and insecurity.Most recent being a few days ago, when

analysts discouraged the Chinese in legalising completely bitcoin as a

viable means of transaction.



The FBI has also put to risk the protection of information as the

company is under scrutiny to curb illegal activities in the country.A

drug company has already been curbed by the agency.

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