They use computers to solve complex match puzzles hence creating the Bitcoins. Currently, a person who wins the mining competition gets 25 Bitcoins, roughly at intervals of ten minutes. Individuals store Bitcoins in digital wallets existing either on the user’s computers or in the cloud. The wallet is a type of virtual bank account, which allows the user to send and receive Bitcoins, save their money and still buy goods. Unlike typical bank accounts, FDIC does not insure the Bitcoin accounts (Pagliery 72). There are however a number of challenges that arise while operating these digital wallets.
Users having their wallets on their computers can accidentally delete their accounts. Viruses can also destroy the accounts with Bitcoins. There have also been a number of incidences in cloud where hackers have fled with the Bitcoins of clients. Even though every transaction is recorded in the public log, the system does not reveal the names of buyers and sellers; they only show their wallet IDs. The anonymity keeps the user’s transactions private, when they buy or sell something; it is not easy to trace their operation back to them.
This is the primary reason it is the preferred online transaction currency for people buying drugs and engaging in other illegal activities. This currency system promises to transform the way people transact and the easiness of doing business in the online
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