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Bitcoin is a virtual currency that is formed from computer code. Unlike a real-world currency such as the US dollar or the euro, it has no central bank and is not sponsored by any government. Instead, its group of people control and regulate it. Advocates say this makes it an resourceful substitute to traditional currencies because it is not subject as the sudden idea of a state that may wish to devalue its money to inflate away debt.
Just like other currencies, bitcoins can be exchanged for goods and services — or for other currencies — provided the other party is willing to accept them. Bitcoin was launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto. Last year enigmatic Australian entrepreneur Craig Wright said he was the creator, but some have raised doubts over his claim.
Other digital currencies followed but bitcoin was by far the most popular. Transactions happen when heavily encrypted codes are passed across a computer network. The network as a complete monitors and verifies the transaction in a process that is wished-for to make certain no single bitcoin can be spent in more than one place simultaneously.
Users can dig for bitcoins — bring new ones into being — by having their computers run complicated and increasingly difficult processes. However, the model is limited and only 21 million units will ever be created. Like any other currency, it fluctuates. But unlike most real-world analogues, bitcoin’s value has swung wildly in a short period. When the unit first came on existence it was worth a few US cents. Its price raised out at $1,165.89 on the Bitcoin Price Index, an average of major.