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why it is difficult to track bitcoins? how bitcoins are created? plzz explain in simple words

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I wanted to ask this question because, in the current hacking attack, the hackers are demanding money to be paid in Bitcoins. So the questions that come to my mind are "how this Bitcoin money is created?" and why is it hard to track? why is it lucrative to the hackers? can anyone explain in simple words, not in the technical maze

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its too bad you can't take a loan against BTC ?

rufflesinc (May. 23, 2017 @ 9:02a) |

Darn bitcoin keeps going up. I was off the grid for a bit on an airplane, and now see it at $2,325, dragging ethereum an... (more)

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To the mooon!

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Basically because there is no central "bank" backing it.

I'm no expert but here's a 2c answer:

Hackers like it because it is the closest thing to sending cash that you can do. While there are records of transactions there isn't any governing body that you could make a claim to and ask for a reversal like you can with a CC.

It is valuable because it is technically rare. The coins are created by solving a complex mathematical problem. Imagine if you assigned a dollar value to prime numbers....there are technically an unlimited number of primes, but as you find more and more of them the search for the next one gets exponentially tougher. Bitcoin "mining" does something similar.

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Google.

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Money sent to the hackers is going to an account that has a number associated with it, everyone is watching that number so even though the transaction Is anonymous, as soon as they move the money the whole world will know that they moved money

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Is there a way to just hold BTC offline? Either on an air-gap computer or even printed out on paper? Seems like the risk is when you allow an intermediary to hold them for you.

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TravelerMSY said:   Is there a way to just hold BTC offline? Either on an air-gap computer or even printed out on paper? Seems like the risk is when you allow an intermediary to hold them for you.
  A bitcoin  is just a big number:  you can print them out if you want. 

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I believe u can launder bitcoins and thats why they do it. Someone with way more knowledge than I can answer.

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You can store them on a USB stick if you want, but if you lose it, then it's gone forever.

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It's hard to track because until the people who own that address try and cash out through something totally stupid that has their names attached to it, then who knows who owns that address?

And since Bitcoin is supposed to be its own currency, maybe the owners of that address never cash out ever? They just use it to buy things without ever converting to USD or any other currency, and you never know who spent the money?

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Bitcoins are created from mining, which is the reward giving to those computers that maintain and support the Bitcoin network (support the blockchain, which is the record of bitcoin transactions).

Anybody can create a Bitcoin wallet and ask somebody else to put money in it, and anybody can put money in it, completely anonymously. Only the person who creates the wallet (and whoever they give the wallet's "key" to) has the ability spend what's in that wallet.

And yes, you can store that wallet offline, on paper, on an "air-gap" computer, or on an isolated USB stick, etc. The mistake people make is storing their bitcoin at exchanges, which can be hacked, mismanaged, stolen, etc.

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TravelerMSY said:   Is there a way to just hold BTC offline? Either on an air-gap computer or even printed out on paper? Seems like the risk is when you allow an intermediary to hold them for you.
  
Yes, google "paper wallet"

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The premise is wrong, bitcoins are _very_ easy to track as every transaction is recorded to a public ledger and can be tracked by anyone with sufficient knowledge. That said, the owner of a bitcoin may be able to remain anonymous, though when they finally convert from bitcoin to a physical asset, then there usually is a paper trail of some sort. That said, the public ledger of all bitcoin transactions is crytographically strong, not falsifiable (without defeating the crypto) and transactions can be traced by through the beginning to bitcoin time.

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johnadamthegreat said:   I wanted to ask this question because, in the current hacking attack, the hackers are demanding money to be paid in Bitcoins. So the questions that come to my mind are "how this Bitcoin money is created?" and why is it hard to track? why is it lucrative to the hackers? can anyone explain in simple words, not in the technical maze
  Bitcoin.org has a very simple video introducing bitcoin on their front page.

Additionally I made a FAQ for crypto-currencies back in 2015, it is archived now but I will add it to the Summary for easy access.

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ZenNUTS said:   Google.
  plzz do it for me. as I am unable to understand the technical jargon mentioned in google sources.

 fw9999 said:   https://en.wikipedia.org/wiki/Bitcoin
  i thought i mentioned to explain it in simple words don't you think I have already checked this source but was unable to understand it. 

Stubtify said:   Basically because there is no central "bank" backing it.

I'm no expert but here's a 2c answer:

Hackers like it because it is the closest thing to sending cash that you can do. While there are records of transactions there isn't any governing body that you could make a claim to and ask for a reversal like you can with a CC.

It is valuable because it is technically rare. The coins are created by solving a complex mathematical problem. Imagine if you assigned a dollar value to prime numbers....there are technically an unlimited number of primes, but as you find more and more of them the search for the next one gets exponentially tougher. Bitcoin "mining" does something similar.

  i undIrstand the first part. but the second part was bit strenuous. I thank you for explaining it 

soundtechie said:   Money sent to the hackers is going to an account that has a number associated with it, everyone is watching that number so even though the transaction Is anonymous, as soon as they move the money the whole world will know that they moved money
so whats the point of asking bitcoins the question remain there.    

TravelerMSY said:   Is there a way to just hold BTC offline? Either on an air-gap computer or even printed out on paper? Seems like the risk is when you allow an intermediary to hold them for you.
  easy words plzz

soundtechie said:   
TravelerMSY said:   Is there a way to just hold BTC offline? Either on an air-gap computer or even printed out on paper? Seems like the risk is when you allow an intermediary to hold them for you.
  A bitcoin  is just a big number:  you can print them out if you want. 

  nice

Luniz97 said:   I believe u can launder bitcoins and thats why they do it. Someone with way more knowledge than I can answer.
  yeah that's for sure

ZenNUTS said:   You can store them on a USB stick if you want, but if you lose it, then it's gone forever.
  so if I can access your USB this means I can use your bitcoins too? same like a wallet? 

ensignlee said:   It's hard to track because until the people who own that address try and cash out through something totally stupid that has their names attached to it, then who knows who owns that address?

And since Bitcoin is supposed to be its own currency, maybe the owners of that address never cash out ever? They just use it to buy things without ever converting to USD or any other currency, and you never know who spent the money?

  so this means we can know who is spending those bitcoins in virtual/digital world but not in real world Am i right?

mapen said:   Bitcoins are created from mining, which is the reward giving to those computers that maintain and support the Bitcoin network (support the blockchain, which is the record of bitcoin transactions).

Anybody can create a Bitcoin wallet and ask somebody else to put money in it, and anybody can put money in it, completely anonymously. Only the person who creates the wallet (and whoever they give the wallet's "key" to) has the ability spend what's in that wallet.

And yes, you can store that wallet offline, on paper, on an "air-gap" computer, or on an isolated USB stick, etc. The mistake people make is storing their bitcoin at exchanges, which can be hacked, mismanaged, stolen, etc.

  that was a bit elaborative and understandable. thank you for your efforts can i put my computer on mining?

novocane said:   The premise is wrong, bitcoins are _very_ easy to track as every transaction is recorded to a public ledger and can be tracked by anyone with sufficient knowledge. That said, the owner of a bitcoin may be able to remain anonymous, though when they finally convert from bitcoin to a physical asset, then there usually is a paper trail of some sort. That said, the public ledger of all bitcoin transactions is crytographically strong, not falsifiable (without defeating the crypto) and transactions can be traced by through the beginning to bitcoin time.
  so if I never convert them to paper currency or deposite them to my bank account, everyone with the knowledge can know who is spending money in the virtual world but not in real world. or the ransomed bitcoins can be traced where they are getting utilized ??

parkdanil said:   
johnadamthegreat said:   I wanted to ask this question because, in the current hacking attack, the hackers are demanding money to be paid in Bitcoins. So the questions that come to my mind are "how this Bitcoin money is created?" and why is it hard to track? why is it lucrative to the hackers? can anyone explain in simple words, not in the technical maze
  Bitcoin.org has a very simple video introducing bitcoin on their front page.

Additionally I made a FAQ for crypto-currencies back in 2015, it is archived now but I will add it to the Summary for easy access.

  yeah, i saw that thread. Sorry, I couIdn't read it entirely. I like your work there. 

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One source said that a smart bad guy will set his ransomware to not activate in at least one nation, a nation that he selects because it has no laws against hacking or money laundering. When his bitcoin account has funds in it, he transfers them to a "real money" account in that nation.

Unfortunately for the currently-famous ransomware bad guys, they reportedly didn't set a nation to exclude. So, they might be charged with a crime in whatever nation they try to convert their bitcoin to "real money."

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Think if it like imaginary tokens from Chuck E cheese but without the sound financial backing of a pizza chain.

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austex said:   One source said that a smart bad guy will set his ransomware to not activate in at least one nation, a nation that he selects because it has no laws against hacking or money laundering. When his bitcoin account has funds in it, he transfers them to a "real money" account in that nation.

Unfortunately for the currently-famous ransomware bad guys, they reportedly didn't set a nation to exclude. So, they might be charged with a crime in whatever nation they try to convert their bitcoin to "real money."

  

Npr quoted an expert saying "if they committed this attack while living in Russia,  that was an incredibly poor life choice. "


Op, have you tried simple.wikipedia.com?

https://simple.m.wikipedia.org/wiki/Bitcoin

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soundtechie said:   
austex said:   One source said that a smart bad guy will set his ransomware to not activate in at least one nation, a nation that he selects because it has no laws against hacking or money laundering. When his bitcoin account has funds in it, he transfers them to a "real money" account in that nation.

Unfortunately for the currently-famous ransomware bad guys, they reportedly didn't set a nation to exclude. So, they might be charged with a crime in whatever nation they try to convert their bitcoin to "real money."

  

Npr quoted an expert saying "if they committed this attack while living in Russia,  that was an incredibly poor life choice. "


Op, have you tried simple.wikipedia.com?

https://simple.m.wikipedia.org/wiki/Bitcoin 

  I did not know Wikipedia had a "simple" option.  Thank you for sharing that!
jerosen said:   Think if it like imaginary tokens from Chuck E cheese but without the sound financial backing of a pizza chain.
  

Ha!
 

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OK, OP, since you said Wikipedia was too hard here's the spoon-fed version - 

https://venturebeat.com/2014/02/17/bitcoin-for-idiots-an-introdu...

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austex said:   One source said that a smart bad guy will set his ransomware to not activate in at least one nation, a nation that he selects because it has no laws against hacking or money laundering. When his bitcoin account has funds in it, he transfers them to a "real money" account in that nation.

Unfortunately for the currently-famous ransomware bad guys, they reportedly didn't set a nation to exclude. So, they might be charged with a crime in whatever nation they try to convert their bitcoin to "real money."

  which nation are you talking about? PLz elaborate.
soundbie said: Npr quoted an expert saying "if they committed this attack while living in Russia, that was an incredibly poor life choice. " Op, have you tried simple.wikipedia.com? https://simple.m.wikipedia.org/wiki/Bitcoin
wooww simple Wikipedia :O that must the find of the century.
fw9999 said: OK, OP, since you said Wikipedia was too hard here's the spoon-fed version - https://venturebeat.com/2014/02/17/bitcoin-for-idiots-an-introdu...

thank you for sharing this link 

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jerosen said:   Think if it like imaginary tokens from Chuck E cheese but without the sound financial backing of a pizza chain.
Bitcoin has the backing of something far more powerful than a pizza chain: human greed and its want of self preservation.

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I see another bitcoin buying panic happening now. It's about $1,920. $2,000 could be soon, but it's anybody's guess when and if.

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vickh said:   and

http://www.cnbc.com/2017/05/22/bitcoin-price-hits-fresh-record-h...

  did anyone here buy BTC when first came out and now $10million richer?

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rufflesinc said:   
vickh said:   and

http://www.cnbc.com/2017/05/22/bitcoin-price-hits-fresh-record-h...

  did anyone here buy BTC when first came out and now $10million richer?

  I feel like we've had this discussion before, the first time BTC hit $1000.

And we all consoled ourselves by generally agreeing that we would have almost universally sold out the first time it crossed $100/BTC (assuming we'd gone in for $1k in the early days of $1/BTC), if we'd held that long, at all.

At least... that's what most of us seemed to tell ourselves to feel better about it, the last time this came up

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its too bad you can't take a loan against BTC ?

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Darn bitcoin keeps going up. I was off the grid for a bit on an airplane, and now see it at $2,325, dragging ethereum and litecoin with it. What goes up must come down, but I'm unsure if and when.

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To the mooon!

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