1. BITCOIN
Bitcoin is a distributed peer-to-peer digital currency that can be transferred instantly and
securely between any two people in the world. It's like electronic cash that you can use to pay
friends or merchants. A commonly used shorthand for this is “BTC” to refer to a price or
amount (e.g.100 BTC). Bitcoins are also very different from traditional currencies. Unlike
dollars or pounds, bitcoins aren't backed by any government. They're a
completely decentralized form of money. Bitcoins aren't linked to any sort of central banking
system or issuing authority, this currency exists in an online world driven by mathematics and
clever encryption protocols. You can use bitcoins for all sorts of real transactions. To do so,
you first buy bitcoins, either through your credit card, a bank account or even anonymously
with cash. Then your bitcoins are transferred directly into your Bitcoin account, and you can
send and receive payments directly to a buyer or seller without the need for a typical go-
between, such as a bank or credit card company. In 2008, a person working under the
pseudonym Satoshi Nakamoto published a document outlining the feasibility of the Bitcoin
concept. To use bitcoins, you need wallet software, which encrypts and maintains your
bitcoin balance on your personal computer. To get started, you must first download and
install the wallet software to your computer or smartphone. Then you can fill your wallet with
bitcoins by using your bank account, credit card or other form of payment. Before anyone can
even use a Bitcoin, those coins must be mined, by a so-called bitcoin mining process. Any
computer can begin mining for bitcoins by using a free mining application. Mining requires
the entire network of Bitcoin-participant computers to do a set amount of work before being
rewarded with a bitcoin. In a process that is similar to a continuous raffle draw, mining nodes
on the network are awarded bitcoins each time they find the solution to a certain
mathematical problem (and thereby create a new block).
Creating a block is a proof of work with a
difficulty that varies with the overall strength of the network. The exact amount of work
required is variable. The network adjusts that workload so that the number of bitcoins rises at
a steady, predetermined rate. It will continue to do so until the number of bitcoins in
circulation reaches its ultimate number, which is 21 million. Currently, the mining process
creates 25 bitcoins every 10 minutes. Every four years, the number of coins that can be mined
will be halved, until the capped limit of coins is reached in the year 2140. After that point, the
number of bitcoins in circulation will be static. With bitcoins, people all over the world can
engage in online gambling, which the U.S. federal government seriously disapproves of.
Bitcoins are also infamously and irrevocably linked to Silk Road, a black market Web site

2. where people can anonymously purchase about anything, including illegal drugs. On a related
site, called The Armory, you can ring up a few weapons with little hassle. There are plenty of
competitors to Bitcoin- PPcoin, Litecoin, Ripple, Freicoin and Namecoin, among others.
Bitcoins development represents a kind of collective evolution; the first of its kind among
currencies.
Reference:
 http://electronics.howstuffworks.com/everyday-tech/bitcoin.htm
 https://en.bitcoin.it/wiki/FAQ
 https://bitcoin.org/bitcoin.pdf
 http://www.weusecoins.com/en/