Top 10 Questions To Find Out How Much You Know About Bitcoin

Top 10 Questions To Find Out How Much You Know About Bitcoin

News
April 10, 2017 by Brian Forester
78
Bitcoin has become one of the trends today, not just on selected individuals but also on various countries. For beginners, Bitcoin has a complex platform making it for them difficult to comprehend. I feel the beginners dilemma since I’ve experienced it as well before, until i studied Bitcoin and realized it’s not that really hard
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Bitcoin has become one of the trends today, not just on selected individuals but also on various countries. For beginners, Bitcoin has a complex platform making it for them difficult to comprehend. I feel the beginners dilemma since I’ve experienced it as well before, until i studied Bitcoin and realized it’s not that really hard after all.

So, to help everyone, especially beginners to understand the idea of Bitcoin, here are the top 10 common questions that beginners always have on the early stages of understanding Bitcoin, along with the answers from the experts.

As the world’s monetary systems teetered on the edge in late 2008, some computer whizzes sought a digital solution. As Lehman Brothers lay dying, a math-based, completely digital means of exchange known as bitcoin was born.

A few months after the white paper that defined it, bitcoin went quietly into operation. As with the internet itself, bitcoin’s first adopters were mostly the highly computer-literate and the highly criminal, followed by speculators. The image of the “digital gold” was first tarnished by association with online drug bazaars such as Silk Road and a massive theft called Mt. Gox, and later by price crashes.

This year, bitcoin returned to the headlines. Its dollar-denominated price hit a record in March amid speculation that the Securities and Exchange Commission would approve a bitcoin exchange-traded fund. On March 10, the SEC ruled against it. Later in March, the SEC rejected another ETF application, from lower-profile firm SolidX, citing the same concerns about the lack of transparency and regulation in bitcoin exchanges and markets. But bitcoin’s price remains above $1,000.

Even without the ETF, investors are enticed by bitcoin’s record run and a sense that, nearing its 10th birthday, the cryptocurrency is here to stay. Late last year, five major banks, including J.P. Morgan Chase, Barclays and Citigroup, tested equity-derivatives trading using some of the technology underlying bitcoin.

But how much do you really know about this increasingly high-profile currency? Let’s find out:

1. Who, or what, is known by the words Satoshi Nakamoto?

A. The pseudonym of the individual who invented bitcoin.

B. A California computer engineer who might have played a role in the invention of bitcoin, but denies it.

C. A collection of computer scientists that jointly launched bitcoin.

D. Nobody really knows, but possibly all of the above.

ANSWER: D.

One of the most intriguing aspects about bitcoin is the reluctance of anyone to take credit for it. In contrast to Wall Street CEOs and hedge-fund managers, bitcoin’s inventor has scrupulously remained behind a pseudonym that he or she uses for public statements. There have been multiple people fingered as “the” Satoshi Nakomoto, but none conclusively. And nobody has made a public statement under that name for years.

2. In the world of bitcoin, what is the blockchain?

A. The company that owns bitcoin.

B. The software on which bitcoin works.

C. A chunky gold necklace popularized by Mr. T.

D. The time-stamped ledger that records all bitcoin transactions.

ANSWER: D.

Whatever happens with the value of bitcoin, the concept of the blockchain will be remembered as the most significant innovation in finance in the past couple of decades. The blockchain is what International Business Machines , which sells a version of it for commercial accounting use, has called a “shared, distributed ledger.” The blockchain has two advantages over other forms of trade settlement: transparency and a self-correcting mechanism. The blockchain is like a massive version of one of those collaborative Excel spreadsheets that anyone in the office can jump aboard. Every transfer of bitcoin appears on the blockchain ledger, recording the coded identity of sender and receiver and the amount transferred.

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