- Bitcoin crosses $12,000 ceiling
- Company offers bitcoin mining
- Company offers blockchain software development
Now that Bitcoin has crossed the $12,000 mark (http://nnw.fm/xHh1a), the demand for Bitcoin mining gear and services is likely to follow the cryptocurrency’s climb to the stratosphere. Despite the caveats, interest in the virtual currency continues to grow. In response, the financial services industry is gearing up to get involved. The Chicago Board Options Exchange (“CBOE”) has promised to start offering Bitcoin futures in December 2017 and the Chicago Mercantile Exchange (“CME”) plans a similar timetable for its Bitcoin futures. Meanwhile in New York, NASDAQ is set to debut its Bitcoin futures product by June 2018, according to Bloomberg (http://nnw.fm/YzrV2). Bitcoin is slipping into the mainstream and as it does, Bitcoin Services (OTC: BTSC) is set to offer its expertise in Bitcoin mining and Blockchain software development.
Bitcoin is, of course, the world’s first completely decentralized digital currency. It differs essentially from what, in recent times, has been regarded as money. Before its advent, there were four main kinds of money, currency, central bank reserves, bank deposits and money market mutual fund deposits, all of which are issued by a trusted institution. The integrity of these issuing authorities is, naturally, vital if one or other of these forms of money is to be widely accepted. Together these four types of money amount to around $13.7 trillion dollars, according to FRED, an economic service of the St. Louis Fed (http://nnw.fm/eT19u). And around 10 percent ($1.5 trillion) of that is held in demand (checking) accounts, a sizeable sum that makes up most of what we use when making payments by electronic means. Now, beginning with Bitcoin, virtual money has been added to the mix and being digital, virtual currencies have increased the amount of funds we can use to transact electronically.
However, although using money balances recorded electronically to make payments offers the advantages of time savings and convenience, such a system poses a problem akin to counterfeiting in the physical world. Making a copy of a digital asset, such as a money balance, stored as a computer file is even easier than counterfeiting bank notes. This possibility of electronic counterfeiting gives rise to what has come to be known as the “double spending” problem, which is one reason that traditional payment systems rely on a trusted third party intermediary.
Bitcoin, as a payment system, solves this double spending problem without relying on a third party. It does this by distributing a record of all transactions, called a ledger, to all users of the system via a peer-to-peer network. Every Bitcoin transaction is registered in this public, distributed ledger, which is called the block chain. New transactions are checked against the block chain to ensure that the same Bitcoins have not been previously spent, thus eliminating the double-spending problem. The global peer-to-peer network, composed of thousands of Bitcoin nodes, takes the place of an intermediary.
In return for verifying transactions and updating the ledger, the operators of these Bitcoin nodes are compensated with newly minted Bitcoins. It’s tough work; to verify a transaction, a node must employ complex mathematical techniques in a process that has been likened to the search for prime numbers. However, rather than looking for prime numbers, Bitcoin miners search for sequences of data called “blocks” that produce a particular pattern when the Bitcoin hash algorithm is applied to the data. When a match occurs, the miner gets new Bitcoins for getting it right plus a fee, in Bitcoins, if that block was used to certify a transaction.
The number of Bitcoins to be supplied has been capped at 21 million. At November 30, 2017, there had been 16.7 million already issued, which leaves over 4 million Bitcoins waiting to be discovered. At a price of $10,000, that’s a fortune of $40 billion for Bitcoin miners.
For more information, visit the company’s website at www.BitcoinServicesCorp.com.
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