What is Bitcoin?

3D illustration of a large group of golden Bitcoins

Bitcoin is an innovative payment network and a new kind of money.

Bitcoin is a type of digital currency that is created and held electronically, and can be transferred between people without a middleman, like a bank. It was created by an entity using the pseudonym Satoshi Nakamoto in 2009. Since then, its popularity has grown, and you can use Bitcoin to pay for pretty much anything today!

Entirely open-source, Bitcoin is owned and controlled by nobody, all of its systems are public, and everybody is welcome to participate in it.

How does Bitcoin work?

Bitcoin is transferred directly from person to person over the Internet. Each person is assigned a digital wallet where they can store their Bitcoin.

How is Bitcoin created?

Bitcoin is generated by people all around the world running software programs that follow a mathematical formula to produce bitcoins. These people are called miners. Miners are tasked with verifying transactions, for which they are rewarded with newly generated bitcoins.

How is Bitcoin different from traditional currency?

While traditional currency is bound to a bank or a country, Bitcoin is completely decentralized. And while traditional currency is based on gold and silver, Bitcoin is based on mathematics, making it a form of cryptocurrency.

Just like gold and silver, bitcoins are difficult to mine, and they are limited in supply. Only 21 million bitcoins are allowed to ever be produced by miners, after which point more bitcoins will cease to be created.

Why use Bitcoin?

For regular folk like you and me, Bitcoin is cheaper to use than many other methods of payment, particularly when it comes to making international transactions. It eliminates any extra fees associated with credit-card transactions, wire transfers, money orders, and check processing. Another major plus with Bitcoin is that you can use it to pay for goods and services without providing your name or address, so you can maintain your privacy.

How do I get bitcoins?

First you’ll need to create a bitcoin wallet. Once you have your bitcoin wallet, you will be given a bitcoin address, which you’ll use to receive payments. There are several ways to get Bitcoin.

From other individuals – You can receive bitcoins from other people in exchange for goods and services. Or your friend might send you bitcoins in exchange for nothing if it was your birthday, for example.

By exchanging currency – You can buy bitcoins using your bitcoin wallet with your local currency. You can also buy bitcoins outside of your bitcoin wallet, using this site to find alternative currency exchange sites.

By becoming a miner – If you are feeling ambitious, you can mine bitcoins by yourself, using this guide as a start.

At a Bitcoin ATM – You can also buy bitcoins from Bitcoin ATMs. The first Bitcoin ATM opened on October 2013 in the Waves coffee shop in Vancouver, Canada. More Bitcoin ATMs have since popped up all over the world!

How popular is Bitcoin?

Bitcoin is certainly growing in popularity. While its decentralization initially made the payment method of choice for the purchase of illicit goods and services (think drugs and hitmen…), more and more larger, more established businesses are allowing their users and customers to pay with Bitcoin.

(we have been accepting Bitcoin since June 2014!)

Many people have also been hoarding Bitcoin as an investment. Like most other investments, however, whether its value will rise or fall remains to be seen…

We hope this article has helped you understand a bit about Bitcoin!


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