Bitcoin is digital currency developed by a software developer Satoshi Nakamoto. Bitcoin can be sent electronically from one user to another, anywhere in the world. It is designed for secure financial transactions that require no central authority, no banks and no government regulators. Bitcoin would let transacting parties remain anonymous, transferable electronically, keep transactions very secure, with very low transaction fees.
Unlike traditional payment networks like Visa or American Express, no single company or person runs the Bitcoin network. Instead, it is a decentralized network of computers around the world that keep track of all Bitcoin transactions, similar to the decentralized network of servers that makes the internet work. The computers that join the network and track Bitcoin transactions are motivated to do so by the new coins that are released to the network every 10 minutes and are given to one of the computers helping to track the transactions and maintain the network.
Unlike government issued money that can be printed by a central bank for an unlimited value, the supply of Bitcoin is mathematically limited to twenty one million bitcoins and the number cannot exceed this cap.
It?s the first example of a growing category of money known as cryptocurrency. The idea was to produce a currency independent of any central authority.
Characteristics
1. Decentralized
The bitcoin network isn?t controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together.And if some part of the network goes offline for some reason, the money keeps on flowing.
2. Easy to set up
Conventional banks make you jump through hoops simply to open a bank account.However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable.
3. Anonymous
Users can hold multiple bitcoin addresses, and they aren?t linked to names, addresses, or other personally identifying information.
4. Completely transparent
Bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain. If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. They just don?t know that it?s yours.
5. No Transaction fees
Bitcoin doesn?t charge any transaction fees
6. Fast
You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.
Why Bitcoins?
Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they?ll go up in value.
Where do you get bitcoins?
GET BITCOINS
- Buy on an Exchange.
Bitcoins are available in bitcoin exchanges. ?bitcoin exchanges? allow people to buy or sell bitcoins using different currencies. Mt. Gox is the largest bitcoin exchange. The easiest way is to just buy them on one of our trusted Bitcoin exchanges.
- Transacting.
Obtaining bitcoins works just like obtaining any other currency. You can sell something you already have for them. You can ask your existing employer to pay you in Bitcoin.
- Transfers.
People can send bitcoins to each other using mobile apps or their computers. It?s similar to sending cash digitally.
- Generating Bitcoin.
A bitcoin is generated when an entity, i.e. a person or a business, uses software power to solve a complex mathematical puzzle that makes the blockchain more secure. The difficulty level of solving the problem is high enough to ensure that it takes time to do it.
- Owning Bitcoins.
Bitcoins are stored in a ?digital wallet,? which exists either in the cloud or on a user?s computer.The wallet is a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money. Unlike bank accounts, bitcoin wallets are not insured by the FDIC.
How does Bitcoin work?
Once you have installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose your addresses to your friends so that they can pay you or vice versa. In fact, this is pretty similar to how email works, except that Bitcoin addresses should only be used once.
Future in question
No one knows what will become of bitcoin. It is mostly unregulated, but that could change. Governments are concerned about taxation and their lack of control over the currency.