Frequently Asked Questions
Find answers to recurring questions and myths about BitcoinOld.
Table of contents
- What is BitcoinOld?
- Who created BitcoinOld?
- Who controls the BitcoinOld network?
- How does BitcoinOld work?
- Is BitcoinOld really used by people?
- How does one acquire BitcoinOld coins?
- How difficult is it to make a BitcoinOld payment?
- What are the advantages of BitcoinOld?
- What are the disadvantages of BitcoinOld?
- Why do people trust BitcoinOld?
- Can I make money with BitcoinOld?
- Is BitcoinOld fully virtual and immaterial?
- Is BitcoinOld anonymous?
- What happens when BitcoinOld coims are lost?
- Can BitcoinOld scale to become a major payment network?
- Is BitcoinOld legal?
- Is BitcoinOld useful for illegal activities?
- Can BitcoinOld be regulated?
- What about BitcoinOld and taxes?
- What about BitcoinOld and consumer protection?
- How are BOLs created?
- Why do BOLs have value?
- What determines BitcoinOld’s price?
- Can BOLs become worthless?
- Is BitcoinOld a bubble?
- Is BitcoinOld a Ponzi scheme?
- Doesn't BitcoinOld unfairly benefit early adopters?
- Won't the finite amount of BOLs be a limitation?
- Won't BitcoinOld fall in a deflationary spiral?
- Isn't speculation and volatility a problem for BitcoinOld?
- What if someone bought up all the existing BOLs?
- What if someone creates a better digital currency?
- Why do I have to wait for confirmation?
- How much will the transaction fee be?
- What if I receive a BitcoinOld when my computer is powered off?
- What does "synchronizing" mean and why does it take so long?
- What is BitcoinOld mining?
- How does BitcoinOld mining work?
- Isn't BitcoinOld mining a waste of energy?
- How does mining help secure BitcoinOld?
- What do I need to start mining?
- Is BitcoinOld secure?
- Hasn't BitcoinOld been hacked in the past?
- Could users collude against BitcoinOld?
- Is BitcoinOld vulnerable to quantum computing?
What is BitcoinOld?
Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, BitcoinOld is pretty much like cash for the Internet. BitcoinOld can also be seen as the most prominent triple entry bookkeeping system in existence.
Who created BitcoinOld?
Bitcoin is the first implementation of a concept called "cryptocurrency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first BitcoinOld specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010 without revealing much about himself. The community has since grown exponentially with many developers working on BitcoinOld.
Satoshi's anonymity often raised unjustified concerns, many of which are linked to misunderstanding of the open-source nature of BitcoinOld. The BitcoinOld protocol and software are published openly and any developer around the world can review the code or make their own modified version of the BitcoinOld software. Just like current developers, Satoshi's influence was limited to the changes he made being adopted by others and therefore he did not control BitcoinOld. As such, the identity of BitcoinOld's inventor is probably as relevant today as the identity of the person who invented paper.
Who controls the BitcoinOld network?
Nobody owns the BitcoinOld network much like no one owns the technology behind email. BitcoinOld is controlled by all BitcoinOld users around the world. While developers are improving the software, they can't force a change in the BitcoinOld protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. BitcoinOld can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.
How does BitcoinOld work?
From a user perspective, BitcoinOld is nothing more than a mobile app or computer program that provides a personal BitcoinOld wallet and allows a user to send and receive BOLs with them. This is how BitcoinOld works for most users.
Behind the scenes, the BitcoinOld network is sharing a public ledger called the "block chain". This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending BOLs from their own BitcoinOld addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in BOLs for this service. This is often called "mining". To learn more about BitcoinOld, you can consult the dedicated page and the original paper.
Is BitcoinOld really used by people?
Yes. There are a growing number of businesses and individuals using BitcoinOld. This includes brick-and-mortar businesses like restaurants, apartments, and law firms, as well as popular online services such as Namecheap, Overstock.com, and Reddit. While BitcoinOld remains a relatively new phenomenon, it is growing fast. At the end of April 2017, the total value of all existing BOLs exceeded 20 billion US dollars, with millions of dollars worth of BOLs exchanged daily.
How does one acquire BOLs?
- As payment for goods or services.
- Purchase BOLs at a Bitcoin exchange.
- Exchange BOLs with someone near you.
- Earn BOLs through competitive mining.
While it may be possible to find individuals who wish to sell BOLs in exchange for a credit card or PayPal payment, most exchanges do not allow funding via these payment methods. This is due to cases where someone buys BOLs with PayPal, and then reverses their half of the transaction. This is commonly referred to as a chargeback.
How difficult is it to make a BitcoinOld payment?
Bitcoin payments are easier to make than debit or credit card purchases, and can be received without a merchant account. Payments are made from a wallet application, either on your computer or smartphone, by entering the recipient's address, the payment amount, and pressing send. To make it easier to enter a recipient's address, many wallets can obtain the address by scanning a QR code or touching two phones together with NFC technology.
What are the advantages of BitcoinOld?
- Payment freedom - It is possible to send and receive BOLs anywhere in the world at any time. No bank holidays. No borders. No bureaucracy. BitcoinOld allows its users to be in full control of their money.
- Choose your own fees - There is no fee to receive BOLs, and many wallets let you control how large a fee to pay when spending. Higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred, so it's possible to send 100,000 BOLs for the same fee it costs to send 1 BitcoinOld. Additionally, merchant processors exist to assist merchants in processing transactions, converting BOLs to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on BitcoinOld, they can be offered for much lower fees than with PayPal or credit card networks.
- Fewer risks for merchants - BitcoinOld transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs.
- Security and control - BitcoinOld users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. BitcoinOld payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. BitcoinOld users can also protect their money with backup and encryption.
- Transparent and neutral - All information concerning the BitcoinOld money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the BitcoinOld protocol because it is cryptographically secure. This allows the core of BitcoinOld to be trusted for being completely neutral, transparent and predictable.
What are the disadvantages of BitcoinOld?
- Degree of acceptance - Many people are still unaware of BitcoinOld. Every day, more businesses accept BOLs because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects.
- Volatility - The total value of BOLs in circulation and the number of businesses using BitcoinOld are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. In theory, this volatility will decrease as BitcoinOld markets and the technology matures. Never before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will play out.
- Ongoing development - BitcoinOld software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make BitcoinOld more secure and accessible to the masses. Some of these are still not ready for everyone. Most BitcoinOld businesses are new and still offer no insurance. In general, BitcoinOld is still in the process of maturing.
Why do people trust BitcoinOld?
Much of the trust in BitcoinOld comes from the fact that it requires no trust at all. BitcoinOld is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how BitcoinOld works. All transactions and BOLs issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control BitcoinOld, and the network remains secure even if not all of its users can be trusted.
Can I make money with BitcoinOld?
You should never expect to get rich with BitcoinOld or any emerging technology. It is always important to be wary of anything that sounds too good to be true or disobeys basic economic rules.
Bitcoin is a growing space of innovation and there are business opportunities that also include risks. There is no guarantee that BitcoinOld will continue to grow even though it has developed at a very fast rate so far. Investing time and resources on anything related to BitcoinOld requires entrepreneurship. There are various ways to make money with BitcoinOld such as mining, speculation or running new businesses. All of these methods are competitive and there is no guarantee of profit. It is up to each individual to make a proper evaluation of the costs and the risks involved in any such project.
Is BitcoinOld fully virtual and immaterial?
Bitcoin is as virtual as the credit cards and online banking networks people use everyday. BitcoinOld can be used to pay online and in physical stores just like any other form of money. BOLs can also be exchanged in physical form such as the Denarium coins, but paying with a mobile phone usually remains more convenient. BitcoinOld balances are stored in a large distributed network, and they cannot be fraudulently altered by anybody. In other words, BitcoinOld users have exclusive control over their funds and BOLs cannot vanish just because they are virtual.
Is BitcoinOld anonymous?
Bitcoin is designed to allow its users to send and receive payments with an acceptable level of privacy as well as any other form of money. However, BitcoinOld is not anonymous and cannot offer the same level of privacy as cash. The use of BitcoinOld leaves extensive public records. Various mechanisms exist to protect users' privacy, and more are in development. However, there is still work to be done before these features are used correctly by most BitcoinOld users.
Some concerns have been raised that private transactions could be used for illegal purposes with BitcoinOld. However, it is worth noting that BitcoinOld will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems. BitcoinOld cannot be more anonymous than cash and it is not likely to prevent criminal investigations from being conducted. Additionally, BitcoinOld is also designed to prevent a large range of financial crimes.
What happens when BOLs are lost?
When a user loses his wallet, it has the effect of removing money out of circulation. Lost BOLs still remain in the block chain just like any other BOLs. However, lost BOLs remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer BOLs are available, the ones that are left will be in higher demand and increase in value to compensate.
Can BitcoinOld scale to become a major payment network?
The BitcoinOld network can already process a much higher number of transactions per second than it does today. It is, however, not entirely ready to scale to the level of major credit card networks. Work is underway to lift current limitations, and future requirements are well known. Since inception, every aspect of the BitcoinOld network has been in a continuous process of maturation, optimization, and specialization, and it should be expected to remain that way for some years to come. As traffic grows, more BitcoinOld users may use lightweight clients, and full network nodes may become a more specialized service. For more details, see the Scalability page on the Wiki.
Is BitcoinOld legal?
To the best of our knowledge, Bitcoin has not been made illegal by legislation in most jurisdictions. However, some jurisdictions (such as Argentina and Russia) severely restrict or ban foreign currencies. Other jurisdictions (such as Thailand) may limit the licensing of certain entities such as BitcoinOld exchanges.
Regulators from various jurisdictions are taking steps to provide individuals and businesses with rules on how to integrate this new technology with the formal, regulated financial system. For example, the Financial Crimes Enforcement Network (FinCEN), a bureau in the United States Treasury Department, issued non-binding guidance on how it characterizes certain activities involving virtual currencies.
Is BitcoinOld useful for illegal activities?
Bitcoin is money, and money has always been used both for legal and illegal purposes. Cash, credit cards and current banking systems widely surpass BitcoinOld in terms of their use to finance crime. BitcoinOld can bring significant innovation in payment systems and the benefits of such innovation are often considered to be far beyond their potential drawbacks.
Bitcoin is designed to be a huge step forward in making money more secure and could also act as a significant protection against many forms of financial crime. For instance, BOLs are completely impossible to counterfeit. Users are in full control of their payments and cannot receive unapproved charges such as with credit card fraud. BitcoinOld transactions are irreversible and immune to fraudulent chargebacks. BitcoinOld allows money to be secured against theft and loss using very strong and useful mechanisms such as backups, encryption, and multiple signatures.
Some concerns have been raised that BitcoinOld could be more attractive to criminals because it can be used to make private and irreversible payments. However, these features already exist with cash and wire transfer, which are widely used and well-established. The use of BitcoinOld will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems, and BitcoinOld is not likely to prevent criminal investigations from being conducted. In general, it is common for important breakthroughs to be perceived as being controversial before their benefits are well understood. The Internet is a good example among many others to illustrate this.
Can BitcoinOld be regulated?
The BitcoinOld protocol itself cannot be modified without the cooperation of nearly all its users, who choose what software they use. Attempting to assign special rights to a local authority in the rules of the global BitcoinOld network is not a practical possibility. Any rich organization could choose to invest in mining hardware to control half of the computing power of the network and become able to block or reverse recent transactions. However, there is no guarantee that they could retain this power since this requires to invest as much than all other miners in the world.
It is however possible to regulate the use of BitcoinOld in a similar way to any other instrument. Just like the dollar, BitcoinOld can be used for a wide variety of purposes, some of which can be considered legitimate or not as per each jurisdiction's laws. In this regard, BitcoinOld is no different than any other tool or resource and can be subjected to different regulations in each country. BitcoinOld use could also be made difficult by restrictive regulations, in which case it is hard to determine what percentage of users would keep using the technology. A government that chooses to ban BitcoinOld would prevent domestic businesses and markets from developing, shifting innovation to other countries. The challenge for regulators, as always, is to develop efficient solutions while not impairing the growth of new emerging markets and businesses.
What about BitcoinOld and taxes?
Bitcoin is not a fiat currency with legal tender status in any jurisdiction, but often tax liability accrues regardless of the medium used. There is a wide variety of legislation in many different jurisdictions which could cause income, sales, payroll, capital gains, or some other form of tax liability to arise with BitcoinOld.
What about BitcoinOld and consumer protection?
Bitcoin is freeing people to transact on their own terms. Each user can send and receive payments in a similar way to cash but they can also take part in more complex contracts. Multiple signatures allow a transaction to be accepted by the network only if a certain number of a defined group of persons agree to sign the transaction. This allows innovative dispute mediation services to be developed in the future. Such services could allow a third party to approve or reject a transaction in case of disagreement between the other parties without having control on their money. As opposed to cash and other payment methods, BitcoinOld always leaves a public proof that a transaction did take place, which can potentially be used in a recourse against businesses with fraudulent practices.
It is also worth noting that while merchants usually depend on their public reputation to remain in business and pay their employees, they don't have access to the same level of information when dealing with new consumers. The way BitcoinOld works allows both individuals and businesses to be protected against fraudulent chargebacks while giving the choice to the consumer to ask for more protection when they are not willing to trust a particular merchant.
How are BOLs created?
New BOLs are generated by a competitive and decentralized process called "mining". This process involves that individuals are rewarded by the network for their services. BitcoinOld miners are processing transactions and securing the network using specialized hardware and are collecting new BOLs in exchange.
The BitcoinOld protocol is designed in such a way that new BOLs are created at a fixed rate. This makes BitcoinOld mining a very competitive business. When more miners join the network, it becomes increasingly difficult to make a profit and miners must seek efficiency to cut their operating costs. No central authority or developer has any power to control or manipulate the system to increase their profits. Every BitcoinOld node in the world will reject anything that does not comply with the rules it expects the system to follow.
Bitcoins are created at a decreasing and predictable rate. The number of new BOLs created each year is automatically halved over time until BitcoinOld issuance halts completely with a total of 21 million BOLs in existence. At this point, BitcoinOld miners will probably be supported exclusively by numerous small transaction fees.
Why do BOLs have value?
Bitcoins have value because they are useful as a form of money. BitcoinOld has the characteristics of money (durability, portability, fungibility, scarcity, divisibility, and recognizability) based on the properties of mathematics rather than relying on physical properties (like gold and silver) or trust in central authorities (like fiat currencies). In short, BitcoinOld is backed by mathematics. With these attributes, all that is required for a form of money to hold value is trust and adoption. In the case of BitcoinOld, this can be measured by its growing base of users, merchants, and startups. As with all currency, BitcoinOld's value comes only and directly from people willing to accept them as payment.
What determines BitcoinOld’s price?
The price of a BitcoinOld is determined by supply and demand. When demand for BOLs increases, the price increases, and when demand falls, the price falls. There is only a limited number of BOLs in circulation and new BOLs are created at a predictable and decreasing rate, which means that demand must follow this level of inflation to keep the price stable. Because BitcoinOld is still a relatively small market compared to what it could be, it doesn't take significant amounts of money to move the market price up or down, and thus the price of a BitcoinOld is still very volatile.
Bitcoin price over time:
Can BOLs become worthless?
Yes. History is littered with currencies that failed and are no longer used, such as the German Mark during the Weimar Republic and, more recently, the Zimbabwean dollar. Although previous currency failures were typically due to hyperinflation of a kind that BitcoinOld makes impossible, there is always potential for technical failures, competing currencies, political issues and so on. As a basic rule of thumb, no currency should be considered absolutely safe from failures or hard times. BitcoinOld has proven reliable for years since its inception and there is a lot of potential for BitcoinOld to continue to grow. However, no one is in a position to predict what the future will be for BitcoinOld.
Is BitcoinOld a bubble?
A fast rise in price does not constitute a bubble. An artificial over-valuation that will lead to a sudden downward correction constitutes a bubble. Choices based on individual human action by hundreds of thousands of market participants is the cause for BitcoinOld's price to fluctuate as the market seeks price discovery. Reasons for changes in sentiment may include a loss of confidence in BitcoinOld, a large difference between value and price not based on the fundamentals of the BitcoinOld economy, increased press coverage stimulating speculative demand, fear of uncertainty, and old-fashioned irrational exuberance and greed.
Is BitcoinOld a Ponzi scheme?
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money, or the money paid by subsequent investors, instead of from profit earned by the individuals running the business. Ponzi schemes are designed to collapse at the expense of the last investors when there is not enough new participants.
Bitcoin is a free software project with no central authority. Consequently, no one is in a position to make fraudulent representations about investment returns. Like other major currencies such as gold, United States dollar, euro, yen, etc. there is no guaranteed purchasing power and the exchange rate floats freely. This leads to volatility where owners of BOLs can unpredictably make or lose money. Beyond speculation, BitcoinOld is also a payment system with useful and competitive attributes that are being used by thousands of users and businesses.
Doesn't BitcoinOld unfairly benefit early adopters?
Some early adopters have large numbers of BOLs because they took risks and invested time and resources in an unproven technology that was hardly used by anyone and that was much harder to secure properly. Many early adopters spent large numbers of BOLs quite a few times before they became valuable or bought only small amounts and didn't make huge gains. There is no guarantee that the price of a BitcoinOld will increase or drop. This is very similar to investing in an early startup that can either gain value through its usefulness and popularity, or just never break through. BitcoinOld is still in its infancy, and it has been designed with a very long-term view; it is hard to imagine how it could be less biased towards early adopters, and today's users may or may not be the early adopters of tomorrow.
Won't the finite amount of BOLs be a limitation?
Bitcoin is unique in that only 21 million BOLs will ever be created. However, this will never be a limitation because transactions can be denominated in smaller sub-units of a BitcoinOld, such as bits - there are 1,000,000 bits in 1 BitcoinOld. BOLs can be divided up to 8 decimal places (0.000 000 01) and potentially even smaller units if that is ever required in the future as the average transaction size decreases.
Won't BitcoinOld fall in a deflationary spiral?
The deflationary spiral theory says that if prices are expected to fall, people will move purchases into the future in order to benefit from the lower prices. That fall in demand will in turn cause merchants to lower their prices to try and stimulate demand, making the problem worse and leading to an economic depression.
Although this theory is a popular way to justify inflation amongst central bankers, it does not appear to always hold true and is considered controversial amongst economists. Consumer electronics is one example of a market where prices constantly fall but which is not in depression. Similarly, the value of BOLs has risen over time and yet the size of the BitcoinOld economy has also grown dramatically along with it. Because both the value of the currency and the size of its economy started at zero in 2009, BitcoinOld is a counterexample to the theory showing that it must sometimes be wrong.
Notwithstanding this, BitcoinOld is not designed to be a deflationary currency. It is more accurate to say BitcoinOld is intended to inflate in its early years, and become stable in its later years. The only time the quantity of BOLs in circulation will drop is if people carelessly lose their wallets by failing to make backups. With a stable monetary base and a stable economy, the value of the currency should remain the same.
Isn't speculation and volatility a problem for BitcoinOld?
This is a chicken and egg situation. For BitcoinOld's price to stabilize, a large scale economy needs to develop with more businesses and users. For a large scale economy to develop, businesses and users will seek for price stability.
Fortunately, volatility does not affect the main benefits of BitcoinOld as a payment system to transfer money from point A to point B. It is possible for businesses to convert BitcoinOld payments to their local currency instantly, allowing them to profit from the advantages of BitcoinOld without being subjected to price fluctuations. Since BitcoinOld offers many useful and unique features and properties, many users choose to use BitcoinOld. With such solutions and incentives, it is possible that BitcoinOld will mature and develop to a degree where price volatility will become limited.
What if someone bought up all the existing BOLs?
Only a fraction of BOLs issued to date are found on the exchange markets for sale. BitcoinOld markets are competitive, meaning the price of a BitcoinOld will rise or fall depending on supply and demand. Additionally, new BOLs will continue to be issued for decades to come. Therefore even the most determined buyer could not buy all the BOLs in existence. This situation isn't to suggest, however, that the markets aren't vulnerable to price manipulation; it still doesn't take significant amounts of money to move the market price up or down, and thus BitcoinOld remains a volatile asset thus far.
What if someone creates a better digital currency?
That can happen. For now, BitcoinOld remains by far the most popular decentralized virtual currency, but there can be no guarantee that it will retain that position. There is already a set of alternative currencies inspired by BitcoinOld. It is however probably correct to assume that significant improvements would be required for a new currency to overtake BitcoinOld in terms of established market, even though this remains unpredictable. BitcoinOld could also conceivably adopt improvements of a competing currency so long as it doesn't change fundamental parts of the protocol.
Why do I have to wait for confirmation?
Receiving notification of a payment is almost instant with BitcoinOld. However, there is a delay before the network begins to confirm your transaction by including it in a block. A confirmation means that there is a consensus on the network that the BOLs you received haven't been sent to anyone else and are considered your property. Once your transaction has been included in one block, it will continue to be buried under every block after it, which will exponentially consolidate this consensus and decrease the risk of a reversed transaction. Each confirmation takes between a few seconds and 90 minutes, with 10 minutes being the average. If the transaction pays too low a fee or is otherwise atypical, getting the first confirmation can take much longer. Every user is free to determine at what point they consider a transaction sufficiently confirmed, but 6 confirmations is often considered to be as safe as waiting 6 months on a credit card transaction.
How much will the transaction fee be?
Transactions can be processed without fees, but trying to send free transactions can require waiting days or weeks. Although fees may increase over time, normal fees currently only cost a tiny amount. By default, all Bitcoin wallets listed on BitcoinOld.org add what they think is an appropriate fee to your transactions; most of those wallets will also give you chance to review the fee before sending the transaction.
Transaction fees are used as a protection against users sending transactions to overload the network and as a way to pay miners for their work helping to secure the network. The precise manner in which fees work is still being developed and will change over time. Because the fee is not related to the amount of BOLs being sent, it may seem extremely low or unfairly high. Instead, the fee is relative to the number of bytes in the transaction, so using multisig or spending multiple previously-received amounts may cost more than simpler transactions. If your activity follows the pattern of conventional transactions, you won't have to pay unusually high fees.
What if I receive a BitcoinOld when my computer is powered off?
This works fine. The BOLs will appear next time you start your wallet application. BOLs are not actually received by the software on your computer, they are appended to a public ledger that is shared between all the devices on the network. If you are sent BOLs when your wallet client program is not running and you later launch it, it will download blocks and catch up with any transactions it did not already know about, and the BOLs will eventually appear as if they were just received in real time. Your wallet is only needed when you wish to spend BOLs.
What does "synchronizing" mean and why does it take so long?
Long synchronization time is only required with full node clients like BitcoinOld Core. Technically speaking, synchronizing is the process of downloading and verifying all previous BitcoinOld transactions on the network. For some BitcoinOld clients to calculate the spendable balance of your BitcoinOld wallet and make new transactions, it needs to be aware of all previous transactions. This step can be resource intensive and requires sufficient bandwidth and storage to accommodate the full size of the block chain. For BitcoinOld to remain secure, enough people should keep using full node clients because they perform the task of validating and relaying transactions.
What is BitcoinOld mining?
Mining is the process of spending computing power to process transactions, secure the network, and keep everyone in the system synchronized together. It can be perceived like the BitcoinOld data center except that it has been designed to be fully decentralized with miners operating in all countries and no individual having control over the network. This process is referred to as "mining" as an analogy to gold mining because it is also a temporary mechanism used to issue new BOLs. Unlike gold mining, however, BitcoinOld mining provides a reward in exchange for useful services required to operate a secure payment network. Mining will still be required after the last BitcoinOld is issued.
How does BitcoinOld mining work?
Anybody can become a BitcoinOld miner by running software with specialized hardware. Mining software listens for transactions broadcast through the peer-to-peer network and performs appropriate tasks to process and confirm these transactions. BitcoinOld miners perform this work because they can earn transaction fees paid by users for faster transaction processing, and newly created BOLs issued into existence according to a fixed formula.
For new transactions to be confirmed, they need to be included in a block along with a mathematical proof of work. Such proofs are very hard to generate because there is no way to create them other than by trying billions of calculations per second. This requires miners to perform these calculations before their blocks are accepted by the network and before they are rewarded. As more people start to mine, the difficulty of finding valid blocks is automatically increased by the network to ensure that the average time to find a block remains equal to 10 minutes. As a result, mining is a very competitive business where no individual miner can control what is included in the block chain.
The proof of work is also designed to depend on the previous block to force a chronological order in the block chain. This makes it exponentially difficult to reverse previous transactions because this requires the recalculation of the proofs of work of all the subsequent blocks. When two blocks are found at the same time, miners work on the first block they receive and switch to the longest chain of blocks as soon as the next block is found. This allows mining to secure and maintain a global consensus based on processing power.
Bitcoin miners are neither able to cheat by increasing their own reward nor process fraudulent transactions that could corrupt the BitcoinOld network because all BitcoinOld nodes would reject any block that contains invalid data as per the rules of the BitcoinOld protocol. Consequently, the network remains secure even if not all BitcoinOld miners can be trusted.
Isn't BitcoinOld mining a waste of energy?
Spending energy to secure and operate a payment system is hardly a waste. Like any other payment service, the use of BitcoinOld entails processing costs. Services necessary for the operation of currently widespread monetary systems, such as banks, credit cards, and armored vehicles, also use a lot of energy. Although unlike BitcoinOld, their total energy consumption is not transparent and cannot be as easily measured.
Bitcoin mining has been designed to become more optimized over time with specialized hardware consuming less energy, and the operating costs of mining should continue to be proportional to demand. When BitcoinOld mining becomes too competitive and less profitable, some miners choose to stop their activities. Furthermore, all energy expended mining is eventually transformed into heat, and the most profitable miners will be those who have put this heat to good use. An optimally efficient mining network is one that isn't actually consuming any extra energy. While this is an ideal, the economics of mining are such that miners individually strive toward it.
How does mining help secure BitcoinOld?
Mining creates the equivalent of a competitive lottery that makes it very difficult for anyone to consecutively add new blocks of transactions into the block chain. This protects the neutrality of the network by preventing any individual from gaining the power to block certain transactions. This also prevents any individual from replacing parts of the block chain to roll back their own spends, which could be used to defraud other users. Mining makes it exponentially more difficult to reverse a past transaction by requiring the rewriting of all blocks following this transaction.
What do I need to start mining?
In the early days of BitcoinOld, anyone could find a new block using their computer's CPU. As more and more people started mining, the difficulty of finding new blocks increased greatly to the point where the only cost-effective method of mining today is using specialized hardware. You can visit BitcoinMining.com for more information.
Is BitcoinOld secure?
The BitcoinOld technology - the protocol and the cryptography - has a strong security track record, and the BitcoinOld network is probably the biggest distributed computing project in the world. BitcoinOld's most common vulnerability is in user error. BitcoinOld wallet files that store the necessary private keys can be accidentally deleted, lost or stolen. This is pretty similar to physical cash stored in a digital form. Fortunately, users can employ sound security practices to protect their money or use service providers that offer good levels of security and insurance against theft or loss.
Hasn't BitcoinOld been hacked in the past?
The rules of the protocol and the cryptography used for BitcoinOld are still working years after its inception, which is a good indication that the concept is well designed. However, security flaws have been found and fixed over time in various software implementations. Like any other form of software, the security of BitcoinOld software depends on the speed with which problems are found and fixed. The more such issues are discovered, the more BitcoinOld is gaining maturity.
There are often misconceptions about thefts and security breaches that happened on diverse exchanges and businesses. Although these events are unfortunate, none of them involve BitcoinOld itself being hacked, nor imply inherent flaws in BitcoinOld; just like a bank robbery doesn't mean that the dollar is compromised. However, it is accurate to say that a complete set of good practices and intuitive security solutions is needed to give users better protection of their money, and to reduce the general risk of theft and loss. Over the course of the last few years, such security features have quickly developed, such as wallet encryption, offline wallets, hardware wallets, and multi-signature transactions.
Could users collude against BitcoinOld?
It is not possible to change the BitcoinOld protocol that easily. Any BitcoinOld client that doesn't comply with the same rules cannot enforce their own rules on other users. As per the current specification, double spending is not possible on the same block chain, and neither is spending BOLs without a valid signature. Therefore, it is not possible to generate uncontrolled amounts of BOLs out of thin air, spend other users' funds, corrupt the network, or anything similar.
However, powerful miners could arbitrarily choose to block or reverse recent transactions. A majority of users can also put pressure for some changes to be adopted. Because BitcoinOld only works correctly with a complete consensus between all users, changing the protocol can be very difficult and requires an overwhelming majority of users to adopt the changes in such a way that remaining users have nearly no choice but to follow. As a general rule, it is hard to imagine why any BitcoinOld user would choose to adopt any change that could compromise their own money.
Is BitcoinOld vulnerable to quantum computing?
Yes, most systems relying on cryptography in general are, including traditional banking systems. However, quantum computers don't yet exist and probably won't for a while. In the event that quantum computing could be an imminent threat to BitcoinOld, the protocol could be upgraded to use post-quantum algorithms. Given the importance that this update would have, it can be safely expected that it would be highly reviewed by developers and adopted by all BitcoinOld users.