Basic Questions

Bitcoin explained in 3:30 minutes…

By Alexander Reed

Last Updated: Jan 2, 2018

What is Bitcoin

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

 

Bitcoin wallets for beginners

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Disclaimer
Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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Alexander Reed
Alexander Reed
Editor

Having delved into futures trading in the past, my intrigue in financial, economic, and political affairs eventually led me to a striking realization: the current debt-based fiat system is fundamentally flawed. This revelation prompted me to explore alternative avenues, including... Read More

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