Bitcoin known as the virtual currency or cryptocurrency, has seen a bumpy evolution. The virtual currency has become wildly successful in its respective in-game economies as they are being used by millions to buy and sell goods, and also in few services with virtual environments. Amazon has recently announced that it will be launching its own virtual currency for a Kindle app store called Amazon Coins. These Amazon coins will be used exclusively within the Kindle store to buy the content for Kindle, such as movies, books, music, TV shows and so on.
The crypto community creates social networks to provide valuable goods and services for its users. The value of the virtual currency is exchangeable for fiat currencies, where the items included with real world value and the virtual currency is converted to real currency by means of exchange. Few crypto communities have gone further in developing the cryptocurrencies which can be accepted in other communities too.
One such example is Bitcoin, which has taken a further step to be claimed as tradable in exactly the same fashion as that of sovereign currencies. Bitcoin is a non-fiat electronic payment which works on a cryptographic system that is the world’s first cryptocurrency. It is a client based, peer to peer, completely distributed currency and does not depend on any central authority to operate. The value for the cryptocurrency is created by the users, and its operation is distributed using an open source client which can be installed on any mobile device or computer.
The cryptocurrency was actually invented as a means to transfer value. Initially it was done through the barter system and then later people started allocating value to the coins using metal. But during the twentieth century the gold or metal standard was abandoned and a monetary system was put in place and the currency designed was termed as fiat currency. The value of these currencies is based on the economic strength of the issue. The value of fiat currencies arises from law, and the currency has support from the government.
Bitcoin was introduced in 2008 and is a concept designed by an anonymous developer going by the pseudonym of Satoshi Nakamoto. This Bitcoin details a decentralized system that has no issue, authority that would serve as a means of exchange, and also as a fully open log of transactions known as the blockchain. These transactions are verified by the miners and create a value to it.