Experts say Bitcoin is becoming increasingly popular as a virtual currency on hacker websites

Golden Finance News - Analysts believe that Bitcoin is a virtual currency. Of course, this avoids the real question - what is Bitcoin?

Anonymity and the lack of middlemen are the root of Bitcoin's appeal. Image source: Golden Finance

Bitcoin advocates describe Bitcoin as a digital or virtual currency that is a medium of exchange and, unlike the U.S. dollar, is decentralized. There is no central bank or middleman, and Bitcoin transactions can be made directly between two parties.

Bitcoin also allows consumers to avoid transaction or banking fees. Because the technology is used to transmit and store information, there is a sense of anonymity and security.

-- Experts say Bitcoin's anonymity benefits are overstated, but law enforcement officials say it remains a popular form of transaction for criminals engaged in everything from sex trafficking and drug smuggling to identity theft and illegal weapons sales.

"Bitcoin is certainly popular among those who use hacker sites and those who want to hide their tracks," said Assistant U.S. Attorney Wei Xiang.

Anonymity and the lack of middlemen are at the root of Bitcoin’s appeal, and demand from consumers and investors drives the ups and downs of Bitcoin’s value. Think of it like a stock or precious metal that is constantly changing.

Bitcoin cannot be viewed as simply electronic cash, but is actually a complex, encrypted computer program product. New bitcoins are brought into circulation every day by miners who use their own computers to process transactions.

To record a transaction, a bitcoin miner must find a network counterpart to a new ledger page in the constantly updated database of bitcoin transactions, which means miners must participate in a computing race in which the winners receive new bitcoins.

- From that point on, these bitcoins will become part of the current 16 million bitcoins in circulation, available to consumers, investors, criminals and non-criminals alike.

——Stories of people getting rich from Bitcoin are not uncommon. For example, a Norwegian bought 5,000 Bitcoins for $27 in 2009, and soon forgot about it. Six years later, he only remembered that he still had these Bitcoins, but at this time, the value of these Bitcoins had reached $980,000.

In 2009, Satoshi Nakamoto created Bitcoin. Many people believe that Satoshi Nakamoto is not one person, but many people.

It is also highly volatile compared to the U.S. dollar. In the past year, Bitcoin has increased in value from $420 to $1,166.