Bit coin is a digital asset and a payment system invented by Satoshi Nakamoto, who published the invention in 2008[12] and released it as open-source software in 2009.[18] The system is peer-to-peer; users can transact directly without an intermediary.[19]:4 Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses bit coin as its unit of account. The system works without a central repository or single administrator, which has led the U.S. Treasury to categorize bit coin as a decentralized virtual currency.[1] Bit coin is often called the first crypto currency, although prior systems existed Bit coin is more correctly described as the first decentralized digital currency It is the largest of its kind in terms of total market value.[27]
Bit coins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into a public ledger. This activity is called mining and miners are rewarded with transaction fees and newly created bit coins.[19] Besides being obtained by mining, bit coins can be exchanged for other currencies, products, and services.[29] Users can send and receive bit coins for an optional transaction fee.
Bit coin as a form of payment for products and services has grown, and merchants have an incentive to accept it because fees are lower than the 2–3% typically imposed by credit card processors.[31] Unlike credit cards, any fees are paid by the purchaser, not the vendor. The European Banking Authority[ and other sources have warned that bit coin users are not protected by refund rights or chargeback’s. Despite a large increase in the number of merchants accepting bit coin, the crypto currency does not have much momentum in retail transactions.
The use of bit coin by criminals has attracted the attention of financial regulators, legislative bodies,[35] law enforcement, and media Criminal activities are primarily centered around black markets and theft, though officials in countries such as the United States also recognize that bit coin can provide legitimate financial services.
Bit coin has drawn the support of a few politicians, notably U.S. Senator Rand Paul, who accepts donations in bit coin.
