The latest financial trend operates in cryptocurrencies. These include litecoins, peercoins, and namecoins… but the first and most popular of them all is called bitcoin.
We’ll explain what bitcoin is, what bitcoin mining means, and whether it is profitable, taking into account the consumption of electricity it involves.
What is a bitcoin?
Bitcoin was the first cryptocurrency. It was founded in 2009, and like the other cryptocurrencies, it is digital money. You cannot touch it with your hands, but it can be used to both purchase and sell things, and for investments.
Cryptocurrencies like bitcoin allow you to carry out transfers of funds between individuals, without any intermediary. All transactions are anonymous, irreversible and guaranteed, in the sense that it is impossible to pay for something without having funds.
How do bitcoins work?
A good analogy is Wikipedia, an encyclopaedia written and revised by practically anonymous collaborators. Anyone can contribute, correct and add nuances in a decentralised structure that is continuously being tested.
The reliability of Wikipedia depends essentially on the question of viewpoint. It is clear that errors occasionally sneak through, but it is also certain that they are usually corrected with unimaginable speed compared to “traditional” encyclopaedias, which had to be sent to have a new edition printed in order to amend errors or incorporate new information.