What is Bitcoin and how does it work? Is it legal? Who’s behind it?

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A bitcoin  is a unit of the currency that is moved around by the Bitcoin network.

Central to Bitcoin is a public ledger, known as the Block Chain.Roughly every 10 minutes, a new block” is added to this chain or ledger. This ledger records all of the transaction that have taken place in the last 10 minutes. And what quantities of bitcoin currency are now held at different public addresses. It is a decentralized means of tracking and assigning wealth or economic value.  Bitcoin is a software protocol, computer network, idea, community, movement..

Banks and government have the legal and physical ability to create money. I won’t get into the details  of how that works, but the main problem is that whenever money is created, it dilutes the value of everyone’s money, which makes it a super-fast, completely silent, taxation.

Sometimes, governments and banks use this power responsibly, but sometimes, they do not. Lately, there has been a lot of the latter, with the Financial crisis of 2007–08 caused by irresponsible lending. So a lot of people are starting to think that we probably are more reliant on banks and government that we want to be. An even more current example is Argentina, which has a 11% inflation (!) on its currency. Bitcoin is getting a strong hold there

How does it work?

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Most people have no idea how money is transferred from one bank to another, or how it’s created in the first place. But all Bitcoin transactions, from the beginning of time, are written down in an enourmous, public ledger. When you transfer money from your Bitcoin wallet to another person, you do that by writing this transaction down in the public ledger. Everyone is watching this ledger and has their own copies of it, and so they now know that there is less money in your wallet, and more money in a friend’s wallet. So everyone knows how much money each wallet contains. This is where your money is stored, in this public ledger with millions of copies that everyone maintains together. They do, however, not know who owns that wallet – Bitcoin has no notion of identity.

Also read- How Bitcoin works ?

Who created it?

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, more or less instantly, with very low transaction fees.

Is Bitcoin Legal?

Bitcoin is of interest to law enforcement agencies, tax authorities, and legal regulators. All of which are trying to understand how the cryptocurrency fits into existing frameworks. The legality of your bitcoin activities will depend on who you are, where you live, and what you are doing with it.

Bitcoin has proven to be a contentious issue for regulators and law enforcers both of which have targeted. The digital currency in an attempt to control its use. We are still early on in the game, and many legal authorities are still struggling to understand the cryptocurrency, let alone make laws around it. Amid all this uncertainty, one question stands out: is bitcoin legal?

The answer is, yes, depending on what you’re doing with it.

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