Everyone is talking about bitcoin.

Like the tulip fever of the early seventeenth century and countless other speculative economic bubbles, Bitcoin last week experienced a dramatic $ 19,850 change in December last year. But what is bitcoin really? Why do you say this city?

What is Bitcoin?

To be fair, most people are puzzled by the concept of digital currency, mainly because it involves understanding a new technology model. However, at its basic level, cryptocurrencies, as they say, are not completely different from the notion of physical assets

An encrypted currency is an encrypted and anonymous virtual currency that makes it safe and difficult to track. It has no physical representation of the only string of numbers and characters that exist only in computer memory. These currencies are traded only on online exchanges, only for cryptocurrencies.

Bitcoin was the first digital currency to begin in 2009 by an anonymous organization or a person named Satoshi Nakomoto, who disappeared from the online community in 2010.

What makes Bitcoin unique is that legal articles-not the value and volume of transactions-depend on the communities in which the transactions are made, while digital currencies are backed by trust. As paper currency requires users to believe that national state banks will pay for the value invested in it, cryptocurrencies require more dispersed trust - their algorithms will prevent fraud and the needs and supplies of other users.

Bitcoins can also be used anonymously because, unlike credit card or bank accounts, your bitcoin account does not have an associated address or identification number, which is why it is attractive to encrypt money. However, bitcoin is not as anonymous as its fans and suspicious authorities - it may track you through your IP address, service provider, or spending pattern.

There are currently 16.78 million bitcoin in circulation, with a limited amount of new bitcoin added each day. And anyone with high-performance computers and technology can get it. Bitcoins dig through powerful algorithms and computers "discover" new bitcoin - essentially solving complex math problems through computational power. Again, this is verified by Blockchain - a virtual grid that contains nodes that represent users as a collective authentication system. Think of every bitcoin transaction as a bank account instead of being authenticated by both parties, but immediately recorded and verified by the entire community, eliminating any chance of fraud.

Unfortunately, digging for Bitcoin requires a lot of power. According to a report from PowerCompare, "mining bitcoin" exceeds the energy consumption of 159 countries around the world. According to Digiconomist, "the annual energy consumption requires 2.905 billion kWh (equal to 1 million MWh) of hungry computers and networks capable of supporting bitcoin transactions." In addition, according to the Bitcoin Energy Consumption Index, 10 U.S. homes can power their electricity daily through a single Bitcoin transaction.

Is bitcoin and cryptocurrency the future of money?

The biggest barrier to Bitcoin is the reluctance of regulators and governments to recognize it. Real world businesses rarely accept, the transaction is also very complicated. Its mysterious origins did not help much. Part of the attraction for bitcoin and other cryptocurrencies for many digital elites is the lack of hurdles and outrageous regulation. However, most of the world's governments have banned cryptocurrencies in some form, and Japan is a prominent exception to its legitimization.

For American authorities, bitcoin is just a way to evade regulation. According to Ben Bernanke, the former chairman of the Federal Reserve, "Bitcoin is an attempt to replace legal tender, evade regulation and government intervention, and I do not think it will succeed." It's also worth noting that there is not Provided by the central bank or international financial institutions.

Banning all initial coin products or ICOs before China first introduced Bitcoin led to panic in the crypto currency exchange. The initial coin product is an initial public offering or an initial public offering of cryptocurrencies. However, instead of acquiring a shareholding, the purchaser obtains a virtual coin for the forthcoming cryptocurrency, at a pre-set value. However, although the People's Bank of China (PBC) itself had warned that uncontrolled cryptocurrencies could threaten global financial stability, it was announced at the end of December that a team had been formed to design their own sovereign cryptocurrency.