Bitcoin is a unit of digital currency, or cryptocurrency, which aims to do away with the problems online users face when purchasing products or services. Bitcoin is considered to be a form of a decentralised currency. Specifically referring to bitcoin, a network of users control and verify all transactions, as opposed to a central authority such as a bank or the government doing so.
This form of digital currency still works like real money. One person pays another person with bitcoin for goods or services. However, once money is exchanged, the record of the transaction is publically displayed onto a ledger used by the network of bitcoin users, known as Block Chain.
Other bitcoin users, known as miners, verify the transactions in Block Chain. After a certain number of transactions have been verified by a miner, they are then compensated with bitcoins. Newly minted bitcoins are generated for this task and this is how new bitcoins are added into circulation. Currently, more than 12 million bitcoins are in circulation. The total amount of bitcoins that can ever be created is capped at 21 million. The creation rate is automatically halved every few years as more bitcoins are added into circulation. This system is modeled after the gold mining system, which makes finding new bitcoins rarer. As we get closer to the 21 million bitcoin cap, the value of bitcoin inevitably increases.
Many online users are hesitant in getting involved in the bitcoin craze because of the many ransomware attacks that have jeopardised online user’s cryptocurrency. In the past, cyber attackers have been deterred by disrupting the money supply. The same may apply to cyber extortion attacks such as ransomware; to eradicate cyber attacks, it may be necessary to ban Bitcoin. F-Secure’s Freedome VPN is a great preventative measure to protect your data and cryptocurrency from these threats. Nearly everything you do online is tracked, and the data is stored. You might wonder why you should care, but websites build a profile of you to target you with manipulative ads and marketing messages. F-Secure FREEDOME is different to other VPNs: it blocks intrusive trackers and makes your online browsing smoother.
Is it wise to get in on the bitcoin craze? Not necessarily. While most companies have started accepting bitcoin as a measure of payment for goods and services, most retailers have not participated in this new form of digital currency. Also, the value of bitcoin has erratically fluctuated over the past few years. Like any other commodity, the value of bitcoin is only worth what people are willing to pay for it.