Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
The European Banking Authority and other sources have warned that bitcoin users are not protected by refund rights or chargebacks. The use of bitcoin by criminals has attracted the attention of financial regulators, legislative bodies, law enforcement, and the media. The FBI prepared an intelligence assessment, entitled Bitcoin: An Innovative Alternative Financial Network, which said that virtual currencies like bitcoin posed a new challenge to law enforcement because they are difficult to trace and confiscate.
In September 2014 the People’s Bank of China prohibited Chinese financial institutions from using bitcoins. After the announcement, the value of bitcoins dropped, and Baidu no longer accepted bitcoins for certain services.
Despite the fact that bitcoin has been labeled as a volatile investment, some people have still found success by investing in bitcoin and then selling it when the value goes up. While this may be a viable option for some people, it’s important to remember that there are also risks involved in this strategy. For one thing, the value of bitcoin is constantly changing, so it’s difficult to predict when the best time to sell will be.
Additionally, if you’re not careful about where you store your bitcoins, they could be stolen by hackers. So if you’re thinking about buying and selling bitcoin on a daily basis, it’s important to do your research and understand both the risks and potential rewards involved.