How Bitcoin works, its potential, and its risks
Bitcoin is a digital virtual currency. Trades are peer-to-peer using a distributed database. In other words, it is the people who use Bitcoin who control Bitcoin. There’s some big institution, and that doesn’t control Bitcoin. Also, there are no fees for international transactions, and there are no rules (although some people have problems) regulating Bitcoin. Bitcoin is actually available and it is said that somewhere in Canada there is even a Bitcoin ATM, but in reality this currency (or rather this money) is a series of digital signatures, which it’s called Bitcoin.
Whether you like it or not, Bitcoin is a great mechanism for money laundering and it’s a great way for criminals looking to conduct untraceable financial transactions on the Internet.
Yes, you can buy as many legal things as you want on Bitcoin. The number of legal products you can buy with Bitcoin is increasing every day, but you can still buy them in traditional currencies (although there are issues with exchange rates and transaction fees). What traditional banknotes can’t do easily are legally problematic acts on the Internet, such as buying illegal hacking tools and weapons, and hiding the profits of selling drugs or stolen information. All of this is easier to do with digital currencies.
However, what I am concerned about is that as speculation progresses, users may actually move away from Bitcoin. When it first became valuable, the value of 1 Bitcoin was much less than $1, but now the value of $1 is well below the value of 1 bitcoin. Many people may be asking, “What is Bitcoin,” “Why did it gain value,” “What kind of mechanism is it in general?” Click here for more information.
Why Bitcoin is worth it?
We will answer your first question. Bitcoin is a digital virtual currency. It is an encrypted string, not a printed banknote or coins that are cast. The question “Why Bitcoin is worth it” is a difficult question, but it’s just as difficult as the question “Why is the euro or dollar worth it? This also applies to Bitcoin.
Creating blocks is to solve extremely difficult math problems, but the answers submitted are very easy to see. Most of the newly created blocks were co-created by a group of miners, and the new Bitcoin will be evenly distributed among them.
But Bitcoin isn’t just for criminals and IT savvy people. Well-known investors in Wall Street and the world have found great value in Bitcoin and are investing a fair amount. So the value of 1 Bitcoin has skyrocketed in the last few months. The total value of existing Bitcoins is currently $3,539,862,626.7474995. The value per Bitcoin was $296.9179, but it was about $13 earlier this year. You can see why everyone is investing in Bitcoin.
Cyber criminals are no different from investors in that they are attracted to something of value. If you’ve read this far, you might think that Bitcoin is under a lot of attacks. Of course, there are malware that targets Bitcoin. They use botnets and Trojans to break into Bitcoin’wallets’ (where users store Bitcoin) and steal Bitcoin.
Kelihos is a famous botnet with built-in ability to steal Bitcoin. Earlier this year, malware appeared to lure machines into botnets on Skype. This botnet attempts to mine large amounts of Bitcoin using the processing power of the victim’s computer. There is also the Trojan Horse ZeroAccess and another Mac version of the Trojan that mines Bitcoin. Besides malware, researchers have also found some vulnerability in Bitcoin wallets and applications.
More common than malware and vulnerabilities are attacks on the market where Bitcoin is bought and sold. Last year, BitFloor , the largest Bitcoin exchange in the United States at that time , was invaded by a server and robbed of virtual currency worth $250,000, resulting in suspension of trading. Another exchange Bitcoinica was also invaded last year, losing $87,000 worth of Bitcoin. The exchange Mt. Gox and the Bitcoin storage service Instawallet were targeted by DoS attacks and both services went down. There was speculation in April of this year that Bitcoin’s value would plummet.