Bitcoins are a form of digital currency that was introduced in 2009 by creator Santoshi Nakamoto as a type of new currency on the footsteps of the economic crises of 2008. The idea was panned out to enable online trading more easy and efficient. Nakamoto wanted to implement a trading software system that generates a method whereby allowing companies to easily trade online. The public was allowed to the software through open source system in 2009.
Bitcoins is essentially a form of currency that is created, traded, and stored electronically and cannot be printed or made into physical money. The transaction of the currency is without any central bank or government authority and is made possible entirely through software specifically designed to hold the bitcoin exchange system. Bitcoins are created using software involving complex calculations and mathematical formulations before being accepted as digital currency. The exchange of this medium is called crypto-currency and is traded via a peer-to-peer interaction.
Creating a bitcoin is known as ‘mining’ and anyone can do it if the person has the required machinery and understands the processing power that would require making one. People compete for a bitcoin by solving mathematical equations and algorithms on computers in distributed networks. They invest their computer knowledge and intellect to generate the currency and verify it on the bitcoin online ledger.
Since its launch, Bitcoin value has witnessed sharp fluctuations. As of 29 September 2014, 1 bitcoin equaled to around $380.