Bitcoin is a type of online currency which was invented. It is solely confined for digital use. Bitcoins are not printed like other currencies. Bitcoins were crafted by individuals. Bitcoins are essentially formed by an increasing number of businesses, which manage computers globally, utilizing software which deciphers complex mathematical challenges.

What is the difference between bitcoin and normal currencies?

Bitcoins are used to purchase items electronically, in the same way in which dollars, yen, and pounds are used to trade digitally. The distinguishing factor between bitcoins and conventional money is that bitcoins cardinal feature is that, it is decentralized. It is not controlled by a single organization or establishment. For this reason, many individuals are comfortable, knowing that their money is not being controlled by banks, which makes a trade within the bitcoin network irresistible.

Who is the creator of bitcoin?

The genius behind bitcoin is a software developer by the name of Satoshi Nakamoto. He proposed the development of an electronic payment system based on mathematical proof. Bitcoin is independent of a central authority. It is transferred electronically, often instantly, and the best part is the low transaction fees and costs applicable.

Who is responsible for printing it?

Nobody. This is not like the conventional system of physically printing money, by a central bank. The rules are not made up by anyone and neither is there a sense of accountability to the general masses. Bitcoin has its own set of rules. Unlike banks, which can simply physically create more money and devalue the present currency, to cover national debt, this does not occur with bitcoin. Instead, bitcoin is created by a network of people and it is not an elite group because anyone can join.

Bitcoins are mined in a scattered set of connections using computing power. This network processes transactions which are made utilising this virtual currency. Bitcoin is essentially its own, payment network.

So can you not whip up unlimited bitcoins?

No, that is not possible. One of the rules of bitcoin is that only 21 million bitcoins can be produced by miners, and that is why the bitcoin system is such a success. However, it should be noted that these coins may be divided into smaller constituents9the smallest divisible amount is one hundred millionth of a bitcoin and it is called a Satoshi, named after the founder of bitcoin.

What is bitcoin based on?

We know that conventional currency I based on silver and gold. Theoretically, handing over a dollar at a bank, could get you some gold in return (although this doesn’t actually happen in reality). So, what is bitcoin then based on, if not on gold and silver. Yes, you guessed right. Mathematics, is the driving force behind bitcoin.

In order to produce bitcoins, people are globally utilising software programmes that follow a mathematical formula to create the bitcoins. People are freely able to access the bitcoin mathematical formula. Also, the formula is open source which means that anyone can check up that there are no glitches with the mathematical formula and that everything is going along as it should be.

What are bitcoins characteristics?

The difference between government supported currencies and bitcoin is that:Bitcoin is decentralized and diverse and not controlled by any single entity. Each and every contraption that mines bitcoin, also administers any transaction and becomes part of the network. Which means that all the activities and contraptions are collaborated. In theory, this means that one particular dominant power is unable to meddle with monetary principles and instigate destruction.

In early 20113 the Central European Bank in Cyprus, decided to confiscate peoples hard earned cash, but with bitcoin there is no chance of such occurrence.

If for some reason, any part of the bitcoin network happens to go offline, the money remains fluid and intact.

It’s decentralized

Bitcoin is decentralized and diverse and not controlled by any single entity. Each and every contraption that mines bitcoin, also administers any transaction and becomes part of the network. Which means that all the activities and contraptions are collaborated. In theory, this means that one particular dominant power is unable to meddle with monetary principles and instigate destruction.

In early 20113 the Central European Bank in Cyprus, decided to confiscate peoples hard earned cash, but with bitcoin there is no chance of such occurance.

If for some reason, any part of the bitcoin network happens to go offline, the money remains fluid and intact.

It’s easy to set up

It is effortless to set up. Traditionally, banks are known for the inconvenience they put you through just to establish a simple account. Setting up merchant accounts for payments is even trickier due to an overwhelming set of formalities and procedures which are essential.

It’s anonymous

Bitcoin is anonymous,with bitcoin it is easy to retain your sense of mystery because clients are able to maintain numerous bitcoin addresses which are not connected to personal particulars and easily recognizable information and evidence.

It’s completely transparent

Bitcoin is blatantly transparent

Every single transaction which ever occurred within the network is stored internally, in a huge version of a general ledger, called the blockchain. Nothing can be concealed from the blockchain. If you possess a publicly utilised bitcoin address, it will mean that the amount of bitcoins stored at that address will be easily viewed by members of the public. The good thing though is that nobody will know who those bitcoins actually belong to. There are various measures that one may take to maintain a secretive identity, within the bitcoin network. One of the ways of remaining mysterious could be to consistently alternate between addresses, and mostly try not to transfer too many bitcoins to one particular address, in other words don’t keep all your eggs in one basket.

Transaction fees are minuscule

Transaction fees are almost non-existant.

While your bank may charge you a certain amount for international transfers, bitcoin wont charge you anything.

It’s fast

It is swift

Money can be sent globally and it will arrive minutes later or as soon as the transaction is processed by the bitcoin network.

It’s non-reversible

Bitcoin is not retrievable

Once your bitcoins are sent, you cannot get them back, unless the recipient returns them to you. What this means is that basically they are gone forever after they are sent.

Theoretically the bitcoin form of currency is an excellent trading tool, but in practice how does it work?

You can read on to discover how bitcoins are mined, the process that follows after a bitcoin transaction is recorded, and basically how the network keeps track of everything.