Bitcoin is a digital currency created and held electronically on a computer. It is an encryption method that transmits confidential information that can only be read by the sender and receiver, a network of individuals, such as the volunteer editors who created Wikipedia. There are no physical bitcoins, only balances held on a public ledger to which everyone has transparent access. Bitcoins are not paper money like dollars, euros or Japanese yen, which are controlled by central banks or monetary authorities. Bitcoin is the first example of a cryptocurrency generated by people and businesses around the world using advanced computer software that solves math problems. Launched in 2009, bitcoin is the first example of a new type of asset called cryptocurrency, a decentralized form of digital cash that eliminates the need for traditional intermediaries like banks and governments to conduct financial transactions.
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Bitcoin has several features that distinguish it from traditional currencies. Central banks or monetary authorities do not control the number of bitcoins. This makes bitcoin global. Anyone with a computer can set up a bitcoin address to receive or transfer bitcoins in seconds. Bitcoin is anonymous and the cryptocurrency allows users to maintain multiple addresses.
Bitcoin has evolved significantly since 2009. People are now even using bitcoin to make instant payments between businesses.
Bitcoin has been criticized for its use in illegal transactions, the large amount of electricity used by miners, price volatility and theft from exchanges. Some economists, including several Nobel laureates, have at various times called it a speculative bubble. Despite all this, bitcoin is still used as an investment and is still breaking records.