Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. It is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.
From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. This is how Bitcoin works for most users.
Behind the scenes, the Bitcoin network is sharing a public ledger called the "block chain". This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This is often called "mining".
To learn more about Bitcoin, see Bitcoin.org.
Check out these 5 Security Tips for Bitcoin Beginners shared by CoinDesk.
In latest news, digital currency investors expect bitcoin to climb even further following likely splits into two other coins in the next several weeks.
Analysts also predict bitcoin will rise on increased investor interest as more "crypto-funds" form and bitcoin derivatives launch. Read more of the report at CNBC.