You don‘t need to understand the details about SHA 256. It‘s only important you know that it can be the basis of a cryptologic puzzle the miners compete to solve. After finding a solution, a miner can build a block and add it to the blockchain. As an incentive, he has the right to add a so-called coinbase transaction that gives him a specific number of Bitcoins. This is the only way to create valid Bitcoins.
In March 2013 the blockchain temporarily split into two independent chains with different rules due to a bug in version 0.8 of the bitcoin software. The two blockchains operated simultaneously for six hours, each with its own version of the transaction history from the moment of the split. Normal operation was restored when the majority of the network downgraded to version 0.7 of the bitcoin software, selecting the backward compatible version of the blockchain. As a result, this blockchain became the longest chain and could be accepted by all participants, regardless of their bitcoin software version.[42] During the split, the Mt. Gox exchange briefly halted bitcoin deposits and the price dropped by 23% to $37[42][43] before recovering to previous level of approximately $48 in the following hours.[44] The US Financial Crimes Enforcement Network (FinCEN) established regulatory guidelines for "decentralized virtual currencies" such as bitcoin, classifying American bitcoin miners who sell their generated bitcoins as Money Service Businesses (MSBs), that are subject to registration or other legal obligations.[45][46][47] In April, exchanges BitInstant and Mt. Gox experienced processing delays due to insufficient capacity[48] resulting in the bitcoin price dropping from $266 to $76 before returning to $160 within six hours.[49] The bitcoin price rose to $259 on 10 April, but then crashed by 83% to $45 over the next three days.[40] On 15 May 2013, US authorities seized accounts associated with Mt. Gox after discovering it had not registered as a money transmitter with FinCEN in the US.[50][51] On 23 June 2013, the US Drug Enforcement Administration listed ₿11.02 as a seized asset in a United States Department of Justice seizure notice pursuant to 21 U.S.C. § 881.[52][better source needed] This marked the first time a government agency had seized bitcoin.[53] The FBI seized about ₿30,000[54] in October 2013 from the dark web website Silk Road during the arrest of Ross William Ulbricht.[55][56][57] These bitcoins were sold at blind auction by the United States Marshals Service to venture capital investor Tim Draper.[54] Bitcoin's price rose to $755 on 19 November and crashed by 50% to $378 the same day. On 30 November 2013 the price reached $1,163 before starting a long-term crash, declining by 87% to $152 in January 2015.[40] On 5 December 2013, the People's Bank of China prohibited Chinese financial institutions from using bitcoins.[58] After the announcement, the value of bitcoins dropped,[59] and Baidu no longer accepted bitcoins for certain services.[60] Buying real-world goods with any virtual currency had been illegal in China since at least 2009.[61]
The successful miner finding the new block is allowed by the rest of the network to reward themselves with newly created bitcoins and transaction fees.[93] As of 9 July 2016,[94] the reward amounted to 12.5 newly created bitcoins per block added to the blockchain, plus any transaction fees from payments processed by the block. To claim the reward, a special transaction called a coinbase is included with the processed payments.[7]:ch. 8 All bitcoins in existence have been created in such coinbase transactions. The bitcoin protocol specifies that the reward for adding a block will be halved every 210,000 blocks (approximately every four years). Eventually, the reward will decrease to zero, and the limit of 21 million bitcoins[g] will be reached c. 2140; the record keeping will then be rewarded solely by transaction fees.[95]
If you have the required hardware, you can mine bitcoin even if you are not a miner. There are different ways one can mine bitcoin such as cloud mining, mining pool, etc. For cloud mining, all you need to do is to connect to the datacenter and start mining. The good thing about this is that you can mine from anywhere and you don’t need a physical hardware to mine.
While cryptocurrencies are digital currencies that are managed through advanced encryption techniques, many governments have taken a cautious approach toward them, fearing their lack of central control and the effects they could have on financial security.[81] Regulators in several countries have warned against cryptocurrency and some have taken concrete regulatory measures to dissuade users.[82] Additionally, many banks do not offer services for cryptocurrencies and can refuse to offer services to virtual-currency companies.[83] Gareth Murphy, a senior central banking officer has stated "widespread use [of cryptocurrency] would also make it more difficult for statistical agencies to gather data on economic activity, which are used by governments to steer the economy". He cautioned that virtual currencies pose a new challenge to central banks' control over the important functions of monetary and exchange rate policy.[84] While traditional financial products have strong consumer protections in place, there is no intermediary with the power to limit consumer losses if bitcoins are lost or stolen.[85] One of the features cryptocurrency lacks in comparison to credit cards, for example, is consumer protection against fraud, such as chargebacks.

^ The word bitcoin first occurred and was defined in the white paper[4] that was published on 31 October 2008.[10] It is a compound of the words bit and coin.[11] There is no uniform convention for bitcoin capitalization. Some sources use Bitcoin, capitalized, to refer to the technology and network and bitcoin, lowercase, to refer to the unit of account.[12] The Wall Street Journal,[13] The Chronicle of Higher Education,[14] and the Oxford English Dictionary[11] advocate use of lowercase bitcoin in all cases, a convention followed throughout this article.
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Bitcoin is pseudonymous rather than anonymous in that the cryptocurrency within a wallet is not tied to people, but rather to one or more specific keys (or "addresses").[41] Thereby, bitcoin owners are not identifiable, but all transactions are publicly available in the blockchain. Still, cryptocurrency exchanges are often required by law to collect the personal information of their users.[citation needed]

In September 2015, the establishment of the peer-reviewed academic journal Ledger (ISSN 2379-5980) was announced. It covers studies of cryptocurrencies and related technologies, and is published by the University of Pittsburgh.[240] The journal encourages authors to digitally sign a file hash of submitted papers, which will then be timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers.[241][242]


As of February 2018, the Chinese Government halted trading of virtual currency, banned initial coin offerings and shut down mining. Some Chinese miners have since relocated to Canada.[32] One company is operating data centers for mining operations at Canadian oil and gas field sites, due to low gas prices.[33] In June 2018, Hydro Quebec proposed to the provincial government to allocate 500 MW to crypto companies for mining.[34] According to a February 2018 report from Fortune,[35] Iceland has become a haven for cryptocurrency miners in part because of its cheap electricity. Prices are contained because nearly all of the country's energy comes from renewable sources, prompting more mining companies to consider opening operations in Iceland.[citation needed]
After much debate, the Ethereum community voted and decided to retrieve the stolen funds by executing what’s known as a hard fork or a change in code. The hard fork moved the stolen funds to a new smart contract designed to let the original owners withdraw their tokens. But this is where things get complicated. The implications of this decision are controversial and the topic of intense debate.
China banned trading in bitcoin, with first steps taken in September 2017, and a complete ban that started on 1 February 2018. Bitcoin prices then fell from $9,052 to $6,914 on 5 February 2018.[40] The percentage of bitcoin trading in the Chinese renminbi fell from over 90% in September 2017 to less than 1% in June 2018.[64] On August 1, 2017 a fork of the network created Bitcoin Cash.
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