Explains the basics of Bitcoins, including an introductory video It’s been hard to ignore the flurry of reports about virtual currency Bitcoin in recent months, but for now Israeli officials are doing just that.
Israeli banks, which have engaged in some Bitcoin transactions, would like clear guidance from regulators on the matter. But sources close to the issue say discussions among representatives from the Bank of Israel, the Israel Securities Authority and relevant units in the justice and finance ministries ended with a decision not to draw up Bitcoin-specific regulations.
Instead, said the sources, who asked not to be identified, Israeli regulators will wait to see how their peers in other countries handle the issue.“The banks supervisor did not find it appropriate at this stage to prohibit or set bank action toward customers who deal in the area of virtual currency,” a Bank of Israel official told TheMarker. Bitcoin is a peer-to-peer payment system and digital currency introduced as open source software in 2009 by pseudonymous developer Satoshi Nakamoto. It is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money.[5] Users send payments by broadcasting digitally signed messages to the network. Participants known as miners verify and timestamp transactions into a shared public database called the block chain, for which they are rewarded with transaction fees and newly minted bitcoins.[6] Conventionally "Bitcoin" capitalized refers to the technology and network whereas "bitcoins" lowercase refers to the currency itself.[7] Bitcoins can be obtained by mining or in exchange for products, services, or other currencies.[8]
Bitcoin has been a subject of scrutiny due to ties with illicit activity. In 2013 the FBI shut down the Silk Road online black market and seized 144,000 bitcoins worth US$28.5 million at the time.[9] The United States, however, is currently considered to be Bitcoin friendly compared to other governments.[10] In China, new rules restricted bitcoin exchange for local currency,[11] and the European Banking Authority has warned that Bitcoin lacks consumer protections.[12] Bitcoins can be stolen, and chargebacks are impossible.[13]
Commercial use of Bitcoin, illicit or otherwise, is currently small compared to its use by speculators, which has fueled price volatility.[14] Bitcoin as a form of payment for products and services has seen growth, however, and merchants have an incentive to accept the currency because transaction fees are lower than the 2–3% typically imposed by credit card processors.[15]Bitcoin uses public-key cryptography, in which pairs of cryptographic keys, one public and one private, are generated.[19] A collection of keys is called a wallet. Note that sometimes this term is used to mean client software in the sense of digital wallet. A Bitcoin transaction transfers ownership to a new address, an alphanumeric string of the form 1FfmbHfnpaZjKFvyi1okTjJJusN455paPH derived from public keys by application of a hash function and encoding scheme. The corresponding private keys act as a safeguard; a valid payment message from an address must contain the associated public key and a digital signature proving possession of the associated private key. Because anyone with a private key can spend all of the bitcoins sent to the corresponding address, the essence of Bitcoin security is protection of private keys.ments (0)
Print Page
Send to friend
Share on Facebook
Share on Twitter
It’s been hard to ignore the flurry of reports about virtual currency Bitcoin in recent months, but for now Israeli officials are doing just that.
ntegral to Bitcoin is a public database and sequential record of all transactions, known as the block chain, that records current bitcoin ownership as well as at all points in the past. By keeping a record of all transactions, the block chain prevents double-spending.[16] Those that maintain the block chain are called miners and are rewarded with newly created bitcoins as well as transaction fees. Payment processing work done by miners verifies each transaction as valid and adds it to the block chain.[25] Bitcoin payment processing fees are optional and generally substantially lower than those of credit cards or money transfers.[26] Currently, doing the work of payment processing is rewarded with newly created bitcoins, 25 per block. The block reward will be halved to 12.5 bitcoins in 2017 and again approximately every four years thereafter. By 2140 there will be approximately 21 million bitcoins in existence and transaction processing will be solely incentivized by transaction fees.[27] Today, transactions that pay a fee may be processed more quickly.[citation needed]
Exchanges money Looking to earn extra cash online?
Join our dedicated community for free now and start earning cash for your online activities, including:My Wallet Be Your Own Bank.wall
