What is Bitcoin
Table of Contents
A decentralized electronic currency
Decentralized – Bitcoins are not controlled by any bank or governmenet. There is an objective “System” which no one can tamper with. an algorithm that sets the rules on how and when Bitcoins are generated.
Electronic – Bitcoins aren’t physical, you transfer them between one another only through the internet using a network of computers and encrypted protocols.
Currency – Bitcoins have an exchange rate just like any other currecny. The rate is determained by the market. When more people use Bitcoin to buy stuff the Bitcoin rises.
Why do you need Bitcoin
Just like in the old days where people used to trade merchandise. Bitcoin is supposed to be an international coin, which no one can manipulate and it’s value is determined by people and not governments.
Who created Bitcoin and who uses it
There are currently many Bitcoin exchanges where you can buy and sell Bitcoins and also some online and offline shops that accept BItcoin.
When was Bitcoin created
Bitcoin was created in 2008 by Satoshi Nakamoto (an alias) and no one knows who he actually is. On April 2013 Bitcoin came to public awareness as its exchange rate soared to $250 (and plumeted to $70 shortly after).
How are Bitcoins created
By “mining” which is the process of letting a computer solve complex mathematical probelms. Once the problem is solved, the owner of that computer gets rewarded in Bitcoins. It is also called mining becuase there are a limited amout of Bitcoins that can ever be created.
Where can you get / store Bitcoins
In order to receive Bitcoins you need a digital wallet which is basically a software that stores your Bitcoins on your computer. You can buy Bitcoins at online exchanges or have someone transfer them to you.
How Bitcoin Works Under the Hood