FUTURE CURRENCY : DIGITALISED  BITCOIN

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros they’re produced by running computers using software. It is a crypto-currency. Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities. The first Bitcoin concept was published in 2009 by Satoshi Nakamoto. However, Satoshi left the project in late 2010 without revealing much about himself. The community has since grown manifolds.

The Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software. Just like current developers, Satoshi's influence was limited to the changes he made being adopted by others and therefore he did not control Bitcoin.

Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally. However, Bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the Bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money.

A software developer called Satoshi Nakamoto proposed Bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically. Bitcoins are not physically printed in the shadows of any central bank, unaccountable to the population. Bitcoins are created digitally by a community of people that anyone can join. Bitcoins are ‘mined’, using computing power in a distributed network. This network also processes transactions made with the virtual currency effectively making Bitcoin its own payment network.

According to the Bitcoin protocol rules only 21 million Bitcoins can ever be created by miners. However, these coins can be divided into smaller parts. The smallest divisible amount is one hundred millionth of a Bitcoin and is called a ‘Satoshi’, after the founder of Bitcoin. Conventional currency has been based on gold or silver etc. But Bitcoin isn’t based on gold, it’s based on pure mathematics. Around the world, people are using software programs that follow a mathematical formula to produce Bitcoins. The mathematical formula is freely available. The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to.

BITCOIN CHARACTERISTICS - Bitcoin has several features that set it apart from Government backed currencies.

1. DECENTRALIZED - The Bitcoin network isn’t controlled by any central authority. Every machine that mines Bitcoin and processes transactions makes up a part of the network. The machines work together. That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown or simply decide to take people’s Bitcoins away from them, as the Central European Bank decided to do in Cyprus in early 2013. If some part of the network goes offline for some reason, the money keeps on flowing.

The supply of Bitcoins is regulated by software and the agreement of users of the system and cannot be manipulated by any Government, bank, organization or individual. The limited inflation of the Bitcoin system's money supply is distributed evenly by CPU to miners who help secure the network.

2. SET UP – In Conventional banking one has to open a bank account. However, you can set up a Bitcoin address in seconds with no questions asked and with no fees payable.

3. ANONYMOUS - Users can hold multiple Bitcoin addresses and they aren’t linked to names, addresses, or other personally identifying information. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. Bitcoin addresses should only be used once to protect privacy.

4. TRANSPARENT - Bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger called the block chain. If you have a used Bitcoin address, everyone will know how many Bitcoins are stored at your address. However some measures can be taken to make the activities more obscure on the Bitcoin network.

5. TRANSACTION FEES - With the use of cryptography, secure payments are possible without costly middlemen. A Bitcoin transaction can be much cheaper than its alternatives and be completed in a short time. This means Bitcoin holds some potential to become a common way to transfer any currency in the future.

6. SECURITY AND CONTROL – Bitcoin transactions are secured by military grade cryptography. Nobody can charge money or make a payment on anyone behalf. Bitcoin can gives control over your money and a strong level of protection against many types of fraud.

7. INTERNATIONAL PAYMENTS - Sending Bitcoins across borders is as easy as sending them across the street. There are no banks to make one wait three business days, no extra fees for making an international transfer and no special limitations on the minimum or maximum amount to be sent.

8. FEES - There is no fee to receive Bitcoins and many wallets allow control how large a fee to pay when charges. Most wallets have reasonable default fees and higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred.

9. IDENTITY PROTECTION - With Bitcoin, there is no credit card number that some malicious actor can collect in order to impersonate. In fact, it is even possible to send a payment without revealing identity almost like with physical money.

10. BITCOIN IN BUSINESSES - Bitcoin is a very secure and inexpensive way to handle payments.

11. MULTI SIGNATURE - Bitcoin also includes a multi signature feature which allows Bitcoins to be spent only if a subset of a group of people authorizes the transaction. This can be used by a board of directors to prevent any member to make expenditures without enough consent from other members as well as to track which members allowed each payment.

12. ACCOUNTING TRANSPARENCY - Many organizations are required to produce accounting documents about their activity. Using Bitcoin allows the highest level of transparency since it can provide information to verify balances and transactions. Non-profit organizations can also allow the public to see how much they receive in donations.

13. THE WALLET – Bitcoin makes it possible to transfer value anywhere in a very easy way and it allows you to be in control of your money. Such great features also come with great security concerns. At the same time, Bitcoin can provide very high levels of security if used correctly.

14. PRICE VOLATILITY - The price of a Bitcoin can unpredictably increase or decrease over a short period of time due to its young economy, novel nature, and sometimes illiquid markets. Consequently, keeping the savings with Bitcoin is not recommended. Bitcoin should be seen like a high risk asset. Bitcoins can be converted into local currency by service providers.

15. EXPERIMENTAL - Bitcoin is an experimental new currency that is in active development. Each improvement makes Bitcoin more appealing but also reveals new challenges as Bitcoin adoption grows. During these growing pains one might encounter increased fees, slower confirmations or even more severe issues.

16. TAXES AND REGULATIONS – Bitcoin is not an official currency. That said, it requires one to pay income, sales, payroll, and capital gains taxes on anything that has value, including Bitcoins.

17. BITCOIN NETWORK - Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can't force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.

18. BITCOIN WORKING - From a user perspective, Bitcoin is nothing more than a computer program that provides a personal Bitcoin wallet and allows a user to send and receive Bitcoins with them. This is how Bitcoin works for most users. Behind the scenes, the Bitcoin network is sharing a public ledger called the "block chain". This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending Bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in Bitcoins for this service. This is often called "mining".

19. APPLICATION - There is a growing number of businesses and individuals using Bitcoin. This includes brick and mortar businesses like restaurants, apartments, law firms, and popular online services such as Namecheap, WordPress, and Reddit. While Bitcoin remains a relatively new phenomenon, it is growing fast. At the end of August 2013, the value of all Bitcoins in circulation exceeded US$ 1.5 billion with millions of dollars worth of Bitcoins exchanged daily.

20. ACQUISITION:
1. As payment for goods or services.
2. Purchase Bitcoins at a Bitcoin exchange.
3. Exchange Bitcoins with someone near you.
4. Earn Bitcoins through competitive mining.

While it may be possible to find individuals who wish to sell Bitcoins in exchange for a credit card most exchanges do not allow funding via these payment methods. This is due to cases where someone buys Bitcoins with PayPal, and then reverses their half of the transaction. This is commonly referred to as a charge back.

21. PAYMENTS - Bitcoin payments are easier to make than debit or credit card purchases and can be received without a merchant account. Payments are made from a wallet application either on your computer or smartphone by entering the recipient's address, the payment amount and pressing send. To make it easier to enter a recipient's address, many wallets can obtain the address by scanning a QR code or touching two phones together with NFC technology.

22. TRUST - Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and Bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.

23. BUSINESS POTENTIAL - Bitcoin is a growing space of innovation and there are business opportunities that also include risks. There is no guarantee that Bitcoin will continue to grow even though it has developed at a very fast rate so far. Investing time and resources on anything related to Bitcoin requires entrepreneurship. There are various ways to make money with Bitcoin such as mining, speculation or running new businesses. All of these methods are competitive and there is no guarantee of profit. It is up to each individual to make a proper evaluation of the costs and the risks involved in any such project.

24. LOSS - When a user loses his wallet, it has the effect of removing money out of circulation. Lost Bitcoins still remain in the block chain just like any other Bitcoins. However, lost Bitcoins remain dormant forever because there is no way for anybody to find the private key that would allow them to be spent again. Because of the law of supply and demand when fewer Bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.

25. LEGALITY - Bitcoin has not been made illegal by legislation in most countries. However, some countries such as Argentina and Russia severely restrict or ban foreign currencies. Other jurisdictions such as Thailand limit the licensing of certain entities such as Bitcoin exchanges.

Regulators from various jurisdictions are taking steps to provide individuals and businesses with rules on how to integrate this new technology with the formal, regulated financial system. For example, the Financial Crimes Enforcement Network, a bureau in the United States Treasury Department, issued non-binding guidance on how it characterizes certain activities involving virtual currencies.

26. ILLEGAL ACTS - Bitcoin is money and money has always been used both for legal and illegal purposes. Cash, credit cards and current banking systems widely surpass Bitcoin in terms of their use to finance crime. Bitcoin can bring significant innovation in payment systems and the benefits of such innovation are often considered to be far beyond their potential drawbacks.

Bitcoin is designed to be a huge step forward in making money more secure and could also act as a significant protection against many forms of financial crime. For instance, Bitcoins are completely impossible to counterfeit. Users are in full control of their payments and cannot receive unapproved charges such as with credit card fraud. Bitcoin transactions are irreversible and immune to fraudulent charge backs. Bitcoin allows money to be secured against theft and loss using very strong and useful mechanisms such as backups, encryption, and multiple signatures.

Some concerns have been raised that Bitcoin could be more attractive to criminals because it can be used to make private and irreversible payments. However, these features already exist with cash and wire transfer, which are widely used and well-established. The use of Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems, and Bitcoin is not likely to prevent criminal investigations from being conducted. In general, it is common for important breakthroughs to be perceived as being controversial before their benefits are well understood. The Internet is a good example among many others to illustrate this.

27. REGULATIONS - The Bitcoin protocol itself cannot be modified without the cooperation of nearly all its users, who choose what software they use. Attempting to assign special rights to a local authority in the rules of the global Bitcoin network is not a practical possibility. Any rich organization could choose to invest in mining hardware to control half of the computing power of the network and become able to block or reverse recent transactions. However, there is no guarantee that they could retain this power since this requires to invest as much than all other miners in the world.

28. GENERATION - New Bitcoins are generated by a competitive and decentralized process called "mining". This process involves that individuals are rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new Bitcoins in exchange.

The Bitcoin protocol is designed in such a way that new Bitcoins are created at a fixed rate. This makes Bitcoin mining a very competitive business. When more miners join the network, it becomes increasingly difficult to make a profit and miners must seek efficiency to cut their operating costs. No central authority or developer has any power to control or manipulate the system to increase their profits. Every Bitcoin node in the world will reject anything that does not comply with the rules it expects the system to follow.

Bitcoins are created at a decreasing and predictable rate. The number of new Bitcoins created each year is automatically halved over time until Bitcoin issuance halts completely with a total of 21 million Bitcoins in existence. At this point, Bitcoin miners will probably be supported exclusively by numerous small transaction fees.

29. VALUATION - Bitcoins have value because they are used as a form of money. Bitcoin has the characteristics of money (durability, portability, fungibility, scarcity, divisibility, and recognizability) based on the properties of mathematics rather than relying on physical properties (like gold and silver) or trust in central authorities (like fiat currencies). In short, Bitcoin is backed by mathematics. With these attributes, all that is required for a form of money to hold value is trust and adoption. In the case of Bitcoin, this can be measured by its growing base of users, merchants, and startups. As with all currency, Bitcoin's value comes only and directly from people willing to accept them as payment.

The price of a Bitcoin is determined by supply and demand. When demand for Bitcoins increases, the price increases, and when demand falls, the price falls. There is only a limited number of Bitcoins in circulation and new Bitcoins are created at a predictable and decreasing rate, which means that demand must follow this level of inflation to keep the price stable. Because Bitcoin is still a relatively small market compared to what it could be, it doesn't take significant amounts of money to move the market price up or down, and thus the price of a Bitcoin is still very volatile.

History is littered with currencies that failed and are no longer used, such as the German Mark during the Weimar Republic and, more recently, the Zimbabwean dollar. Although previous currency failures were typically due to hyper inflation of a kind that Bitcoin makes impossible, there is always potential for technical failures, competing currencies, political issues and so on.

As a basic rule of thumb, no currency should be considered absolutely safe from failures or hard times. Bitcoin has proven reliable for years since its inception and there is a lot of potential for Bitcoin to continue to grow. However, no one is in a position to predict what the future will be for Bitcoin.

30. NUMBERS - Bitcoin is unique in that only 21 million Bitcoins will ever be created. However, this will never be a limitation because transactions can be denominated in smaller sub-units of a Bitcoin, such as bits - there are 1,000,000 bits in 1 Bitcoin. Bitcoins can be divided up to 8 decimal places (0.000 000 01) and potentially even smaller units if that is ever required in the future as the average transaction size decreases.

31. HOARDING - Only a fraction of Bitcoins issued to date are found on the exchange markets for sale. Bitcoin markets are competitive, meaning the price of a Bitcoin will rise or fall depending on supply and demand. Additionally, new Bitcoins will continue to be issued for decades to come. Therefore even the most determined buyer could not buy all the Bitcoins in existence. This situation isn't to suggest, however, that the markets aren't vulnerable to price manipulation; it still doesn't take significant amounts of money to move the market price up or down, and thus Bitcoin remains a volatile asset thus far.

32. TRANSACTION CONFIRMATION - Receiving notification of a payment is almost instant with Bitcoin. However, there is a delay before the network begins to confirm your transaction by including it in a block. A confirmation means that there is a consensus on the network that the Bitcoins you received haven't been sent to anyone else and are considered your property. Once your transaction has been included in one block, it will continue to be buried under every block after it, which will exponentially consolidate this consensus and decrease the risk of a reversed transaction. Each confirmation takes between a few seconds and 90 minutes, with 10 minutes being the average. If the transaction pays too low a fee or is otherwise atypical, getting the first confirmation can take much longer. Every user is free to determine at what point they consider a transaction sufficiently confirmed, but 6 confirmations is often considered to be as safe as waiting 6 months on a credit card transaction.

33. TRANSACTION FEE - Transactions can be processed without fees, but trying to send free transactions can require waiting days or weeks. Although fees may increase over time, normal fees currently only cost a tiny amount. By default, all Bitcoin wallets listed on Bitcoin.org add what they think is an appropriate fee to your transactions; most of those wallets will also give you chance to review the fee before sending the transaction.

Transaction fees are used as a protection against users sending transactions to overload the network and as a way to pay miners for their work helping to secure the network. The precise manner in which fees work is still being developed and will change over time. Because the fee is not related to the amount of Bitcoins being sent, it may seem extremely low or unfairly high. Instead, the fee is relative to the number of bytes in the transaction, so using multisig or spending multiple previously-received amounts may cost more than simpler transactions. If your activity follows the pattern of conventional transactions, you won't have to pay unusually high fees.

34. SYNCHRONIZATION - Long synchronization time is only required with full node clients like Bitcoin Core. Technically speaking, synchronizing is the process of downloading and verifying all previous Bitcoin transactions on the network. For some Bitcoin clients to calculate the spendable balance of your Bitcoin wallet and make new transactions, it needs to be aware of all previous transactions. This step can be resource intensive and requires sufficient bandwidth and storage to accommodate the full size of the block chain. For Bitcoin to remain secure, enough people should keep using full node clients because they perform the task of validating and relaying transactions.

35. MINING - Mining is the process of spending computing power to process transactions, secure the network, and keep everyone in the system synchronized together. It can be perceived like the Bitcoin data center except that it has been designed to be fully decentralized with miners operating in all countries and no individual having control over the network. This process is referred to as "mining" as an analogy to gold mining because it is also a temporary mechanism used to issue new Bitcoins. Unlike gold mining, however, Bitcoin mining provides a reward in exchange for useful services required to operate a secure payment network. Mining will still be required after the last Bitcoin is issued.

Anybody can become a Bitcoin miner by running software with specialized hardware. Mining software listens for transactions broadcast through the peer-to-peer network and performs appropriate tasks to process and confirm these transactions. Bitcoin miners perform this work because they can earn transaction fees paid by users for faster transaction processing, and newly created Bitcoins issued into existence according to a fixed formula.

For new transactions to be confirmed, they need to be included in a block along with a mathematical proof of work. Such proofs are very hard to generate because there is no way to create them other than by trying billions of calculations per second. This requires miners to perform these calculations before their blocks are accepted by the network and before they are rewarded. As more people start to mine, the difficulty of finding valid blocks is automatically increased by the network to ensure that the average time to find a block remains equal to 10 minutes. As a result, mining is a very competitive business where no individual miner can control what is included in the block chain.

The proof of work is also designed to depend on the previous block to force a chronological order in the block chain. This makes it exponentially difficult to reverse previous transactions because this requires the recalculation of the proofs of work of all the subsequent blocks. When two blocks are found at the same time, miners work on the first block they receive and switch to the longest chain of blocks as soon as the next block is found. This allows mining to secure and maintain a global consensus based on processing power.

Bitcoin miners are neither able to cheat by increasing their own reward nor process fraudulent transactions that could corrupt the Bitcoin network because all Bitcoin nodes would reject any block that contains invalid data as per the rules of the Bitcoin protocol. Consequently, the network remains secure even if not all Bitcoin miners can be trusted.

Spending energy to secure and operate a payment system is hardly a waste. Like any other payment service, the use of Bitcoin entails processing costs. Services necessary for the operation of currently widespread monetary systems, such as banks, credit cards, and armored vehicles, also use a lot of energy. Although unlike Bitcoin, their total energy consumption is not transparent and cannot be as easily measured.

Bitcoin mining has been designed to become more optimized over time with specialized hardware consuming less energy, and the operating costs of mining should continue to be proportional to demand. When Bitcoin mining becomes too competitive and less profitable, some miners choose to stop their activities. Furthermore, all energy expended mining is eventually transformed into heat, and the most profitable miners will be those who have put this heat to good use. An optimally efficient mining network is one that isn't actually consuming any extra energy. While this is an ideal, the economics of mining are such that miners individually strive toward it.

Mining creates the equivalent of a competitive lottery that makes it very difficult for anyone to consecutively add new blocks of transactions into the block chain. This protects the neutrality of the network by preventing any individual from gaining the power to block certain transactions. This also prevents any individual from replacing parts of the block chain to roll back their own spends, which could be used to defraud other users. Mining makes it exponentially more difficult to reverse a past transaction by requiring the rewriting of all blocks following this transaction.

In the early days of Bitcoin, anyone could find a new block using their computer's CPU. As more and more people started mining, the difficulty of finding new blocks increased greatly to the point where the only cost-effective method of mining today is using specialized hardware. You can visit www.bitcoinmining.com for more information.

36. SECURITY - The Bitcoin technology - the protocol and the cryptography - has a strong security track record, and the Bitcoin network is probably the biggest distributed computing project in the world. Bitcoin's most common vulnerability is in user error. Bitcoin wallet files that store the necessary private keys can be accidentally deleted, lost or stolen. This is pretty similar to physical cash stored in a digital form. Fortunately, users can employ sound security practices to protect their money or use service providers that offer good levels of security and insurance against theft or loss.

37. HACKING ISSUES - The rules of the protocol and the cryptography used for Bitcoin are still working years after its inception, which is a good indication that the concept is well designed. However, security flaws have been found and fixed over time in various software implementations. Like any other form of software, the security of Bitcoin software depends on the speed with which problems are found and fixed. The more such issues are discovered, the more Bitcoin is gaining maturity.

There are often misconceptions about thefts and security breaches that happened on diverse exchanges and businesses. Although these events are unfortunate, none of them involve Bitcoin itself being hacked, nor imply inherent flaws in Bitcoin; just like a bank robbery doesn't mean that the dollar is compromised. However, it is accurate to say that a complete set of good practices and intuitive security solutions is needed to give users better protection of their money, and to reduce the general risk of theft and loss. Over the course of the last few years, such security features have quickly developed, such as wallet encryption, offline wallets, hardware wallets, and multi-signature transactions.

38. USERS COLLUSION - It is not possible to change the Bitcoin protocol easily. Any Bitcoin client that doesn't comply with the same rules cannot enforce their own rules on other users. As per the current specification, double spending is not possible on the same block chain, and neither is spending Bitcoins without a valid signature. Therefore, It is not possible to generate uncontrolled amounts of Bitcoins out of thin air, spend other users' funds, corrupt the network, or anything similar.

However, powerful miners could arbitrarily choose to block or reverse recent transactions. A majority of users can also put pressure for some changes to be adopted. Because Bitcoin only works correctly with a complete consensus between all users, changing the protocol can be very difficult and requires an overwhelming majority of users to adopt the changes in such a way that remaining users have nearly no choice but to follow. As a general rule, it is hard to imagine why any Bitcoin user would choose to adopt any change that could compromise their own money.

39. VULNERABLITY - Most systems relying on cryptography in general are, including traditional banking systems. However, quantum computers don't yet exist and probably won't for a while. In the event that quantum computing could be an imminent threat to Bitcoin, the protocol could be upgraded to use post-quantum algorithms. Given the importance that this update would have, it can be safely expected that it would be highly reviewed by developers and adopted by all Bitcoin users.

40. APPLICATION PROCEDURE:
1. Knowledge - Bitcoin is different than what you know and use every day. Before you start using Bitcoin, there are a few things that you need to know in order to use it securely and avoid common pitfalls.

2. Wallet - You can bring a Bitcoin wallet in your everyday life with your mobile or you can have a wallet only for online payments on your computer. In any case, choosing your wallet can be done in a minute.

3. Receiving - You can get Bitcoins by accepting them as a payment for goods and services or by buying them from a friend or someone near you. You can also buy them directly from an exchange with your bank account.

4. Spending - There is a growing number of services and merchants accepting Bitcoin all over the world. You can use Bitcoin to pay them and rate your experience to help honest businesses to gain more visibility.

41. HOW TO ACCEPT BITCOIN?
1. Information - Bitcoin does not require merchants to change their habits. However, Bitcoin is different than what you know and use every day. Before you start using Bitcoin, there are a few things that you need to know in order to use it securely and avoid common pitfalls.

2. Processing - You can process payments and invoices by yourself or you can use merchant services and deposit money in your local currency or Bitcoins. Most point of sales businesses use a tablet or a mobile phone to let customers pay with their mobile phones.

3. Accounting and taxes - Merchants often deposit and display prices in their local currency. In other cases, Bitcoin works similarly to a foreign currency. To get appropriate guidance regarding tax compliance for your own jurisdiction, you should contact a qualified accountant.

4. Visibility - There is a growing number of users searching for ways to spend their Bitcoins. You can submit your business in online directories to help them easily find you. You can also display the Bitcoin logo on your website or your brick and mortar business.

42. BALANCES AND BLOCK CHAIN – The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending Bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.

43. PRIVATE KEYS - A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining.

44. MAKING A HASH - This general ledger is a long list of blocks, known as the 'blockchain'. It can be used to explore any transaction made between any Bitcoin addresses, at any point on the network. Whenever a new block of transactions is created, it is added to the blockchain, creating an increasingly lengthy list of all the transactions that ever took place on the Bitcoin network. A constantly updated copy of the block is given to everyone who participates, so that they know what is going on.

But a general ledger has to be trusted, and all of this is held digitally. How can we be sure that the blockchain stays intact, and is never tampered with? This is where the miners come in.

When a block of transactions is created, miners put it through a process. They take the information in the block, and apply a mathematical formula to it, turning it into something else. That something else is a far shorter, seemingly random sequence of letters and numbers known as a hash. This hash is stored along with the block, at the end of the blockchain at that point in time.

Hashes have some interesting properties. It’s easy to produce a hash from a collection of data like a Bitcoin block, but it’s practically impossible to work out what the data was just by looking at the hash. And while it is very easy to produce a hash from a large amount of data, each hash is unique. If you change just one character in a Bitcoin block, its hash will change completely.

Miners don’t just use the transactions in a block to generate a hash. Some other pieces of data are used too. One of these pieces of data is the hash of the last block stored in the blockchain.

Because each block’s hash is produced using the hash of the block before it, it becomes a digital version of a wax seal. It confirms that this block – and every block after it – is legitimate, because if you tampered with it, everyone would know.

If you tried to fake a transaction by changing a block that had already been stored in the blockchain, that block’s hash would change. If someone checked the block’s authenticity by running the hashing function on it, they’d find that the hash was different from the one already stored along with that block in the blockchain. The block would be instantly spotted as a fake.

Because each block’s hash is used to help produce the hash of the next block in the chain, tampering with a block would also make the subsequent block’s hash wrong too. That would continue all the way down the chain, throwing everything out of whack.

45. INNOVATION - The Bitcoin protocol is not just about sending money from A to B. It has many features and opens many possibilities that the community is still exploring. Here are some of the technologies currently being researched and in some cases, turned into real products and services. The most interesting uses of Bitcoin are probably still to be discovered.

46. FRAUD - An unprecedented level of security is possible with Bitcoin. The network provides users with protection against most prevalent frauds like chargebacks or unwanted charges, and Bitcoins are impossible to counterfeit. Users can backup or encrypt their wallet and hardware wallets could make it very difficult to steal or lose money in the future. Bitcoin is designed to allow its users to have complete control over their money.

47. CROWD FUNDING - Bitcoin can be used to run Kickstarter-like crowd funding campaigns, in which individuals pledge money to a project that is taken from them only if enough pledges are received to meet the target. Such assurance contracts are processed by the Bitcoin protocol, which prevents a transaction from taking place until all conditions have been met. Learn more about the technology behind crowd funding and try Lighthouse.

48. DISPUTES - Bitcoin can be used to develop innovative dispute mediation services using multiple signatures. Such services could make it possible for a third party to approve or reject a transaction in case of disagreement between the other parties without having control on their money. Since these services would be compatible with any user and merchant using Bitcoin, this would likely lead to free competition and higher quality standards.

49. TRANSPARENCY - All Bitcoin transactions are public and transparent and the identity of the people behind the payments is private by default. This allows individuals and organizations to work with flexible transparency rules. For instance, a business can choose to reveal certain transactions and balances only to certain employees just like a non-profit organization is free to allow the public to see how much they receive in daily and monthly donations.

50. ACCESSIBILITY - All payments in the world can be fully interoperable. Bitcoin allows any bank, business or individual to securely send and receive payments anywhere at any time, with or without a bank account. Bitcoin is available in a large number of countries that still remain out of reach for most payment systems due to their own limitations. Bitcoin increases global access to commerce and it can help international trades to flourish.

51. TIPS AND DONATIONS - Bitcoin has been a particularly efficient solution for tips and donations in several cases. Sending a payment only requires one click and receiving donations can be as simple as displaying a QR code. Donations can be visible for the public, giving increased transparency for non-profit organizations. In cases of emergencies such as natural disasters, Bitcoin donations could contribute to a faster international response.

52. MICRO PAYMENTS - Imagine listening to Internet radio paid by the second, viewing web pages with a small tip for each ad not shown, or buying bandwidth from a WiFi hotspot by the kilobyte. Bitcoin is efficient enough to make all of these ideas possible. Learn more about the technology behind Bitcoin micro payments or about future upgrades currently being designed and implemented to make micro payments more accessible.

53. MULTI-SIGNATURE ACCOUNTS - Multiple signatures allow a transaction to be accepted by the network only if a certain number of a defined group of persons agree to sign the transaction. This could be used by a board of directors to prevent any member to spend parts of their treasury without other members' consent. This can also be used by banks to prevent theft by blocking payments above a threshold if the user does not provide additional credentials.

54. AUTOMATED SOLUTIONS - Automated services usually have to deal with costs and limitations of cash or credit card payments. This includes all kinds of vending machines, from bus ticket booths to coffee machines. Bitcoin is suited to be used in a new generation of automated services as well as to cut their operating costs. Imagine self-driving taxis, or a store where your basket lets you pay your purchases without waiting at the queue. Many ideas are possible.

55. COUNTRY WISE OBSERVATION

Argentina	Under the National Constitution of Argentina, Bitcoins may be considered money but not legal currency.
Australia	In December 2013, the governor of the Reserve Bank of Australia indicated in an interview about Bitcoin that "There would be nothing to stop people in this country deciding to transact in some other currency in a shop if they wanted to. There’s no law against that, so we do have competing currencies.
Bangladesh	In September 2014, Bangladesh Bank said that "anybody caught using the virtual currency could be jailed under the country's strict anti-money laundering laws"
Belgium	The Minister of Finance indicated that government intervention with regard to the Bitcoin system does not appear necessary at the present time.
Bolivia	Banco Central de Bolivia issued a resolution banning Bitcoin in 2014.
Brazil	Not regulated, according to communication of Brazilian Central Bank 25.306/2014.
Bulgaria	Bitcoin is regulated by law that discusses payment systems and payment services.
Canada	Bitcoin would seem to be classified pursuant to the current provisions of the PPSA simply as an "intangible". Bitcoin is regulated under anti-money laundering and counter-terrorist financing laws in Canada.
Chile	There is no regulation on the use of Bitcoins.
China	While private parties can hold and trade Bitcoins in China, regulation prohibits financial firms like banks from doing the same.
Colombia	The circular from 26 March 2014 by Superintendence Financier de Colombia states that the use of Bitcoin is not regulated in Colombia.
Croatia	On 6 December 2013, the Croatian National Bank reportedly conducted a discussion on the circulation of digital currencies and concluded that the Bitcoin is not illegal in Croatia.
Czech Republic	Bitcoin trading does not require authorization by the Czech National Bank and the Czech National Bank cannot grant such an authorization.
Cyprus	The use of Bitcoins is not regulated in Cyprus.
Denmark	Denmark’s Financial Supervisory Authority issued a statement declaring that Bitcoin is not a currency and stating that it will not regulate its use.
Ecuador	Ecuadorian government issued a ban on Bitcoin and other digital currencies.
Estonia	In Estonia, the use of Bitcoins is not regulated or otherwise controlled by the government.
European Union	The European Union has passed no specific legislation relative to the status of the Bitcoin as a currency. In October 2015, the Court of Justice of the European Union ruled that "The exchange of traditional currencies for units of the ‘Bitcoin’ virtual currency is exempt from VAT" and that "Member States must exempt, inter alia, transactions relating to ‘currency, bank notes and coins used as legal tender’", making Bitcoin a currency as opposed to being a commodity.
Finland	The Finnish Tax Administration has issued instructions for the taxation of virtual currencies, including the Bitcoin.
France	The French Ministry of Finance issued regulations on July 11, 2014 pertaining to the operation of virtual currency professionals, exchanges, and taxation.
G7	In 2013 the G7's Financial Action Task Force issued the following statement in guidelines which may be applicable to companies involved in transmitting Bitcoin and other currencies, According to the communication on Bitcoin issued by Federal Financial Supervisory Authority on 19 December 2013, Bitcoins are legally binding financial instruments that fall into the category of units of account, in accordance with the first sentence of section 1(11) of the German Banking Act.
Germany	According to the communication on Bitcoin issued by Federal Financial Supervisory Authority on 19 December 2013, Bitcoins are legally binding financial instruments that fall into the category of units of account, in accordance with the first sentence of section 1(11) of the German Banking Act.
Greece	No specific legislation on Bitcoins exists in Greece.
Hong Kong	On 8 January 2014, the Secretary for Financial Services and the Treasury addressed Bitcoin in the Legislative Council stating that "Hong Kong at present has no legislation directly regulating Bitcoins and other virtual currencies of similar kind. However, our existing laws (such as the Organised and Serious Crimes Ordinance) provide sanctions against unlawful acts involving Bitcoins, such as fraud or money laundering.
Iceland	According to a 2014 opinion from the Central Bank of Iceland "there is no authorization to purchase foreign currency from financial institutions in Iceland or to transfer foreign currency across borders on the basis of transactions with virtual currency. For this reason alone, transactions with virtual currency are subject to restrictions in Iceland." This does not stop businesses in Iceland from mining Bitcoins.
India	On 28 December 2013, the Deputy Governor of the Reserve Bank of India, K. C. Chakrabarty, made a statement that the Reserve Bank of India had no plans to regulate Bitcoin.
Indonesia	On 6 February 2014, the Bank Indonesia issued a press release related to Bitcoin stating "In view of the Act No. 7 Year 2012 concerning Currency and Act No. 23 Year 1999 which has been amended several times, the latest with Act No. 6 Year 2009, Bank Indonesia states that Bitcoin and other virtual currency are not currency or legal payment instrument in Indonesia.
Ireland	The Central Bank of Ireland was quoted in the Assembly of Ireland as stating that it does not regulate Bitcoins.
Israel	As of 23 December 2013, Israel had not adopted any specific legislation regulating Bitcoins
Italy	Italy does not regulate Bitcoin use by private individuals.
Japan	Japan officially recognizes Bitcoin and digital currencies as money.
Jordan	The government of Jordan has issued a warning discouraging the use of Bitcoin and other similar systems.
Kyrgyzstan	In a July, 2014, statement of the National Bank of the Kyrgyz Republic made clear that "the use of 'virtual currency', Bitcoins, in particular, as a means of payment in the Kyrgyz Republic will be a violation of the law of our state."
Lebanon	The government of Lebanon has issued a warning discouraging the use of Bitcoin and other similar systems.
Lithuania	Bank of Lithuania released a warning on 31 January 2014 that Bitcoin is not recognized as legal tender in Lithuania and that Bitcoin users should be aware of high risks that come with the usage of it.
Luxembourg	The Commission de Surveillance du Secteur Financier has issued a communication in February 2014 acknowledging the status of currency to the Bitcoin and other crypto currencies. The first Bit Licence was issued in October 2015, and the government is actively supporting this development.
Malaysia	No official statement regarding the Bank Negara Malaysia’s views of the Bitcoin system was located.
Malta	Malta currently does not have any regulations specifically pertaining to Bitcoins.
New Zealand	The Reserve Bank of New Zealand states: "Non-banks do not need our approval for schemes that involve the storage and/or transfer of value (such as ‘Bitcoin’) – so long as they do not involve the issuance of physical circulating currency (notes and coins).
Netherlands	Virtual currencies such as Bitcoins currently do not fall within the scope of the Act on Financial Supervision of the Netherlands.
Nicaragua	News reports indicate that Bitcoins are being used in the country.
Norway	The Norwegian Tax Administration has issued a statement that Bitcoins will be treated as capital property for tax-related purposes.
Pakistan	Currently there are no regulations in Pakistan. As per State Bank of Pakistan, Bitcoin is unregulated until some bigger player wants to enter the market.
Philippines	On 6 March 2014, Bangko Sentral ng Pilipinas (BSP) issued a statement on risks associated with Bitcoin trading and usage. Bitcoin exchanges are not regulated by BSP at the moment.
Poland	The use of the Bitcoin in Poland is not regulated by a legal act at present.
Portugal	The Bitcoin has no specific legal framework in Portugal.
Romania	As of March 2015, an official statement of the Romanian National Bank mentioned that "using digital currencies as payment has certain risks for the financial system".
Russia	As of November 2016, Bitcoin are "not illegal" (this according to a Russian federal tax service letter).
Singapore	In December 2013, the Monetary Authority of Singapore reportedly stated that "whether or not businesses accept Bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene."
Slovakia	The National Bank of Slovakia (NBS),stated that Bitcoin does not have the legal attributes of a currency, and therefore does not fall under national control.
Slovenia	On December 23, 2013, the Ministry of Finance of the Republic of Slovenia issued a formal opinion about the status of the Bitcoin and other virtual currencies in response to a request from the Tax Administration of the Republic of Slovenia. The opinion states that the Bitcoin is not a monetary means under Slovenian law and not a financial instrument.
South Africa	In December 2014 the Reserve Bank of South Africa issued a position paper on Virtual Currencies whereby it declared that virtual currency had ‘no legal status or regulatory framework’.
South Korea	While not illegal in the country, Korean authorities will prosecute illegal activity involving Bitcoin and have indicted at least one individual for purchasing drugs with Bitcoin.
Spain	Transactions in Bitcoins are subject to the same laws as barter transactions.
Sweden	The Swedish Tax Agency has given a preliminary ruling on Value Added Tax (VAT) on Bitcoins, stating that trade in Bitcoins is not subject to Swedish VAT, but is instead subject to the Finansinspektionen (Financial Supervisory Authority) regulations and treated as a currency. The decision has been appealed by the Swedish Tax Authority.
Switzerland	Bitcoin businesses in Switzerland are subject to anti-money laundering regulations and in some instances may need to obtain a banking license.
Taiwan	Bitcoin ATMs are banned here:Taiwan but Bitcoins can be purchased at over 6000 convenience store kiosks.
Thailand	Bank of Thailand declared Bitcoin illegal in 2013, but some Bitcoin companies have been able to obtain business licenses.One startup denied a business license was reportedly told that "buying and selling Bitcoins, using Bitcoins to buy or sell goods and services, and transferring Bitcoins in and out of Thailand were all currently illegal." Update 2016 May,10 Bank of Thailand Suggests Bitcoin Not Illegal But Warns Against its Use.
Turkey	No formal regulations on the Bitcoin exist in Turkey.
United Kingdom	The government of the United Kingdom has stated that the Bitcoin is currently unregulated.
United States	The U.S. Treasury classified Bitcoin as a convertible decentralized virtual currency in 2013. The Commodity Futures Trading Commission, CFTC, classified Bitcoin as a commodity in September 2015. In September 2016, a federal judge ruled that "Bitcoins are funds within the plain meaning of that term".
Vietnam	Bitcoin is not lawfully approved and protected according to State Bank of Vietnam in February, 2014.Trading in Bitcoin in Vietnam is still unrestricted and unregulated by law, and two largest Bitcoin markets in Vietnam - VBTC and Bitcoin Vietnam are working without being restricted. In December 2016, the government confirmed to develop legal framework for Bitcoin in Vietnam that should be finished by December 2017.

56. BITCOIN FRIENDLY COUNTRIES - Estonia:The small Baltic nation of Estonia not only has a history of jumping on the latest technological innovation, but its tech-friendly government seems willing to implement innovations like blockchain technology for healthcare, banking services and even governance by allowing its citizens to become “e-Residents.” This service also gives Estonian citizens and businesses digital authentication. It was also one of the first to use a blockchain-based e-voting service that enables people to become shareholders of Nasdaq’s Tallinn Stock Exchange.

Well known as the birthplace of Skype, it now hosts a number of Bitcoin ATMs and startups such as Paxful, a global peer-to-peer buying and selling service for Bitcoins. With one of the highest internet penetration rates in the world, Estonia is well positioned to be a place where a crypto currency users can certainly feel welcome.

United States: Unsurprisingly, the US hosts the highest number of crypto currency users and Bitcoin trading volumes in the world. Bolstered by Silicon Valley, which is home to numerous crypto currency, blockchain related startups, and the highest number of Bitcoin ATMs in the world, the US has been at the forefront of the digital currency space since the beginning.

Moreover, as a global financial superpower, many nations across the globe look to the US for guidance in relation to crypto currency's legal status and regulatory clarity not only from Washington D.C., but also individual states such as California, New York, and New Hampshire, just to name a few. Therefore, the US will undoubtedly serve as the testing ground for crypto-regulation in the years ahead, as other nations look on to see which approach works best (Spoiler: it probably won’t be New York’s).

The peer-to-peer Bitcoin trading service Local Bitcoins has shown incessant growth in Bitcoin trading volume since 2013, a good indicator of organic demand considering the large population and number of Bitcoin users.