What is ฿itcoin?

฿ίtcoίn is The first decentralized digital currency that was created in 2009 by an unknown software developer using the alias Satoshi Nakamoto, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with low transaction fees.

฿ίtcoίn is a form of digital currency, created and held electronically. No one controls it. Unlike Dollars or Euros, ฿ίtcoίns are not printed -– they are produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.

Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need to give your real name. More merchants are beginning to accept ฿ίtcoίn; You can buy web hosting services, pizza or even manicures, etc.

Why ฿ίtcoίns?

฿ίtcoίns can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because ฿ίtcoίns 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 ฿ίtcoίns as an investment, hoping that they will go up in value.

What makes it different from normal currencies?

฿ίtcoίn can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.

However, ฿ίtcoίn’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the ฿ίtcoίn network. This puts some people at ease, because it means that a large bank can’t control their money.

Acquiring ฿ίtcoίns

Buy on Exchanges

Several marketplaces called “฿ίtcoίn Exchanges” allow people to buy or sell ฿ίtcoίns using different currencies. Mt. Gox is the largest ฿ίtcoίn exchange, while Coinbase along with Bitstamp and Bitfinex are also leading exchanges. But security can be a concern; ฿ίtcoίns worth tens of millions of dollars were stolen from Bitfinex when it was hacked in 2016.

Transfers

People can send ฿ίtcoίns to each other using mobile apps or their computers. It is similar to sending cash digitally.

Mining

People compete to “mine” ฿ίtcoίns using computers to solve complex math puzzles. This is how ฿ίtcoίns are created. Currently, as I write this post, a winner is rewarded with 12.5 ฿ίtcoίns roughly every 10 minutes.

Owning ฿ίtcoίns

฿ίtcoίns 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 ฿ίtcoίns, pay for goods or save their money. Unlike bank accounts, ฿ίtcoίn wallets are not insured by the FDIC.

Anonymity

Though each ฿ίtcoίn transaction is recorded in a public log, names of buyers and sellers are never revealed -– only their wallet IDs. While that keeps ฿ίtcoίn users’ transactions private, it also lets them buy or sell anything without easily tracing it back to them. That is why it has become the currency of choice for people online buying drugs or other illicit activities.

Future in Question

No one knows what will become of ฿ίtcoίn. It is mostly unregulated, but that could change. Governments are concerned about taxation and their lack of control over the currency.

Read more about ฿ίtcoίn at wikipedia.