This is to understand theta knowing about bit coin and value of digital currencies are done through cryptographic techniques. These help in decentralizing a network of computers for every user. Mining takes place and they are not controlled by single person. These are considered as first digital currencies that are developed in the market. They increase bitcoin price. Use of digital currency leads to bit coin exchanges too. Currency traders can also trade in bit coin exchange. They have centralized authority in cloud that represents that user can directly use bit coins.
Bit coin does not have a centralized authority or clearing house for instance government, central bank, master card or Visa network. The peer-to-peer payment network is managed by users and miners around the world. The currency is anonymously transferred directly between users through the internet without going through a clearing house. This means that transaction fees are much lower.
Bit coin is created through a process called “Bit coin mining”. Miners around the world use mining software and computers to solve complex bit coin algorithms and to approve Bit coin transactions. They are awarded with transaction fees and new Bit coins generated from solving Bit coin algorithms.
There is a limited amount of Bit coins in circulation. The difficulty to mine Bit coins becomes harder as more Bit coins are generated, and the maximum amount in circulation the limit will not be reached until approximately the years. This makes Bit coins more valuable as more people use them.
