It really Bitcoin virtual and immaterial?
Bitcoin is as virtual as credit cards or online banking solutions used by people every day. Bitcoin can be used to make payments online or in stores like any other form of money. Bitcoinii can also be traded in physical form such as coins Casascius but to pay using the mobile phone is usually more convenient. Bitcoin balances are stored in a huge distributed network of data and fraudster can not be changed by anyone. In other words, Bitcoin users have exclusive control over their funds and bitcoinii can not simply disappear because they are virtual.
The anonymous Bitcoin?
Bitcoin is designed to allow its users to send and receive payments with an acceptable level of confidentiality as any other form of money. But Bitcoin is not as anonymous and can not provide the same level of confidentiality as cash money. Using Bitcoin raises enough evidence in the public register. There are various ways to protect the privacy of users, with more under development. However, there is enough work to do before these methods are used correctly Bitcoin users.
There are controversies about private transactions that could be used for illegal purposes. But Bitcoin is worth noting that in the end will be subject to existing regulations in the financial systems. Bitcoin can not be more anonymous than cash money and not put obstacles in the official investigation authorities. In addition, Bitcoin is constructed so as to prevent a wide range of financial illegalities.
What happens when bitcoinii are lost?
When a user loses his wallet, basically those coins removed from circulation. Bitcoinii lost will remain in chain blocks like any other Bitcoin. But bitcoinii lost forever remain inactive because it is impossible for anyone to find key (s) that would allow private to be spent again. Due to the law of supply and demand where Bitcoin few available, those left will have more demand, and they will have a higher value to compensate.
Bitcoin may become a major payment network?
Bitcoin network can already process a much higher number of transactions per second than it does today. On the other hand, it is not yet ready to be compared with the major credit card networks. Currently, work on lifting those limitations and future requirements are already well known. From the outset, every aspect of Bitcoin network has been in a continuous process of maturation and specialization optimization is expected to happen the same in the years ahead. As traffic increases, more users use the Bitcoin client and lightweight whole network nodes could become a rather specialized service. For more details can be found on the Wiki page scalability.
Bitcoin Is it legal?
To the best of our knowledge, Bitcoin has been declared illegal in most laws of the various jurisdictions. But some jurisdictions (such as Argentina or Russia) restrict or prohibit foreign currencies. Other jurisdictions (like Thailand) may limit the licensing of certain entities such as Bitcoin exchange sites.
Regulators in different jurisdictions are steps to provide individuals and companies such rules should integrate this new technology with the formal financial system and regularly. For example, illegality Combating Financial Network (FinCEN), an institution of the United States Treasury Department issued guidance not imposed by law on the classification of certain activities involving digital currencies.
Bitcoin illegal activity is useful for?
Bitcoin is money, and money was always used for lawful purposes but also illegal. Cash, credit cards and current banking system far outweigh the degree of use Bitcoin financing illegal activities. Bitcoin can make a significant innovation in payments and benefits of such innovations are often considered well above potential disadvantages.
Bitcoin is made to be a huge step forward in the way to make money more secure and can also function as a significant protection against many forms of financial irregularities. For example, bitcoinii are completely tamper-proof. Users have total control over their transactions and payments can not be affected if the unauthorized credit card fraud. Bitcoin transactions are irreversible and immune against fraudulent chargebacks sites. Bitcoin allows money to be secure against theft or loss using powerful and useful mechanisms such as backups, encryption and multiple signatures.
There is controversy about the fact that Bitcoin may be attractive to use by those who do illegal things because it allows payments and private irreversible. However, the cash and wire transfers already have these features, both widely used and well established. Using Bitcoin will no doubt be subject to similar regulations that already exist within the existing financial systems and management Bitcoin is unlikely to prevent formal investigations. In general, it is common that some important discoveries to be perceived as controversial before that its benefits are well understood. The Internet is a good example along with many others to illustrate this.
Bitcoin can be governed?
Bitcoin protocol itself can not be changed without the cooperation of almost all users, who choose what software to use. Trying to assign special rights to a local authority within the rules of global Bitcoin network is not a practical possibility. Any organization with enough resources can choose to invest in hardware mined to control half the computational power of the network and can block or reverse the recent transactions. However, there is no guarantee that this will be able to hold this power since it means to invest nearly as miners in the world combined.
On the other hand it is possible to regulate the use of Bitcoin in a similar manner as other economic consequences. Like the dollar, Bitcoin can be used for a wide range of purposes, some of which may be considered legitimate or not depending on the laws of such jurisdiction. In this case, Bitcoin is no different than any other tool or resource and may be subject to different regulations in each country. Using Bitcoin can be made difficult by restrictive regulations in this case is difficult to determine what percentage of users will continue to use this technology. A government that chooses to prohibit Bitcoin will only prevent businesses and domestic markets to develop, innovation moving to other countries. The challenge is regulatory institutions, as usual, to develop effective solutions without affecting the development of new markets and business.
But about Bitcoin and taxes?
Bitcoin is a fiat currency with legal status in any jurisdiction, but often financial responsibility vis a vis the taxes will increase regardless of the medium used. There is a wide range of laws in different jurisdictions can make income, sales, wages, profits from sales or other tax liability increase by Bitcoin.
But about Bitcoin and consumer protection?
Bitcoin delivers people, allowing them to make transactions according to their own conditions. Each user can send and receive payments in a manner similar to the cash but can also take part in more complex contracts. Multiple signatures allow a network transactions to be accepted only if a certain number of a defined group of people fall agreed to sign the transaction. This enables the development of innovative services for mediation of disputes in the future. Such services might allow a third party to approve or reject a transaction if a dispute between other parties, but without having control over the money. Unlike the cash and other payment methods Bitcoin allows leaving a public evidence that the transaction really took place, which can potentially be used in an appeal against companies with fraudulent practices.
It is also worth noting that while retailers usually depend on their public reputation to stay in business and to pay employees, they do not have access to the same level of information when dealing with new customers. The way it works Bitcoin allows both customers and companies are protected against fraudulent chargebacks sites while providing the customer to ask for more protection when you are not willing to trust a particular trader.
How are created bitcoinii?
Bitcoin us are generated through a competitive process and decentralized called "mining." This process implies a reward for those providing this service. Bitcoin miners and secure transaction processing network using specialized hardware and create new Bitcoin collected in return for work done.
Bitcoin protocol is designed in such a way that we Bitcoin are created at a fixed rate. It makes Bitcoin mining is a very competitive business. When several miners joins it becomes surprisingly difficult to make a profit and miners must become more efficient in order to reduce operating costs. No central authority or programmer does not have the power needed to control or manipulate the system to increase their personal profit. Each node Bitcoin world will reject any deviating from the rules they are expected to follow the system.
Bitcoinii are created in a decreasing rate and predictable. The number of new Bitcoin create each year is halved periodically until Bitcoin generation completely stops when there will be 21 million Bitcoin. At this point, Bitcoin miners probably will be rewarded exclusively from numerous small transaction fees.
Why have bitcoinii value?
Bitcoinii have value because they are useful as a form of money. Bitcoin has the characteristics of a dime (durability, portability, fungibility, scarcity, divisibility and is easily recognized) based more on mathematical properties than the physical properties (such as gold and silver) or trust central authorities (as usual fiat currencies). In short, Bitcoin is provided by mathematics. Given these attributes, everything needs a form of money to have value trust and adoption. If Bitcoin, this can be measured by number of users, merchants and learned growing companies. As with all exchange value of a Bitcoin comes only from people willing to accept it as payment.
What determines the price of a Bitcoin?
The price of Bitcoin is dictated by supply and demand. When Bitcoin demand increases, the price, and when demand falls, drops and price. There are a limited number in circulation and Bitcoin Bitcoin us are created in a steady and downwards, which means that the application must follow this pattern of inflation to keep the price stable. Because Bitcoin is still a relatively small market compared to what could become, there is no need enormous amounts of money to move the market price in one direction or another, the price of Bitcoin is still very volatile.
Bitcoin price, from 2013 to 2015: