WHAT IS BITCOIN ?
Bitcoin is a form of digital currency which is based on an
open source code that was created and is held electronically.
Bitcoin is a decentralized form of currency, meaning that it
does not belong to any form of government and is not controlled
by anyone.It is a consensus network that enables a new payment
system and a completely digital money. It is the first decentralized
peer-to-peer payment network that is powered by its users with no central
authority or middlemen. From a user perspective, Bitcoin is pretty much like
cash for the Internet. Bitcoin can also be seen as the most prominent triple
entry bookkeeping system in existence.
WHO DEVELOPED BITCOIN?
The original Bitcoin code was designed by Satoshi Nakamoto under MIT open source credentials. In 2008 Nakamoto outlined the idea behind Bitcoin in his White Paper, which scientifically described how the cryptocurrency would function. Bitcoin is the first successful digital currency designed with trust in cryptography over central authorities. Satoshi left the Bitcoin code in the hands of developers and the community in 2010. Thus far hundreds of developers have added to the core code throughout the years.
WHAT IS BITCOIN MINING?
Bitcoin mining is analogous to the mining of gold, but its digital form. The process involves specialized computers solving algorithmic equations or hash functions. These problems help miners to confirm blocks of transactions held within the network. Bitcoin mining provides a reward for miners by paying out in Bitcoin in turn the miners confirm transactions on the blockchain. Miners introduce new Bitcoin into the network and also secure the system with transaction confirmation. They are also rewarded network fees for when they harvest new coin and a time when the last bitcoin is found mining will continue.
IS BITCOIN USED FOR ILLEGAL ACTIVITIES?
This is a yet another controversial topic. Because of the freedom and the degree of anonymity that the use of Bitcoin offers, many users who were seeking to purchase or solicit illegal goods or services initially turned to the use of Bitcoin as a method of payment.
CAN BITCOIN BE REGULATED IN ANY WAY?
Again, when a user decides to use a specific type of software for their Bitcoin wallet, they are deciding what direction the Bitcoin network is heading towards. In other words, you need the cooperation of nearly every single user in order to modify any aspect of the Bitcoin protocol.
IS BITCOIN ANONYMOUS?
Participants in Bitcoin transactions are identified by public addresses – those are the long strings of around 30 characters you see in a person’s Bitcoin address, usually starting with the numerals ‘1’ or ‘3’. For every transaction, the sending and receiving addresses are publicly-viewable.
HOW CAN I SELL BITCOINS?
Bitcoins can be sold locally using LocalBitcoins, on Bitcoin brokerages / exchanges, using two-way Bitcoin Teller Machines (BTM’s) or you can pay for a good or service with them. Bitcoins can be sold to just about anyone as long as they have a Bitcoin address, and can be sold for any fiat currency in the world or traded for a physical good. Feel free to check out our recommended list of exchanges and brokerage services to sell your bitcoins online.
CAN I MAKE MONEY WITH BITCOIN?
You should never expect to get rich with Bitcoin or any emerging technology. It is always important to be wary of anything that sounds too good to be true or disobeys basic economic rules. Bitcoin is a growing space of innovation and there are business opportunities that also include risks. There is no guarantee that Bitcoin will continue to grow even though it has developed at a very fast rate so far. Investing time and resources on anything related to Bitcoin requires entrepreneurship. There are various ways to make money with Bitcoin such as mining, speculation or running new businesses. All of these methods are competitive and there is no guarantee of profit. It is up to each individual to make a proper evaluation of the costs and the risks involved in any such project.
WHY DO PEOPLE TRUST BITCOIN?
Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.
WHAT ARE THE ADVANTAGES OF BITCOIN?
Payment freedom - It is possible to send and receive bitcoins anywhere in the world at any time. No bank holidays. No borders. No bureaucracy. Bitcoin allows its users to be in full control of their money.
Choose your own fees - There is no fee to receive bitcoins, and many wallets let you control how large a fee to pay when spending. Higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred, so it's possible to send 100,000 bitcoins for the same fee it costs to send 1 bitcoin. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.
Transparent and neutral - All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.