Bitcoin is simply a form of digital currency that is created and held online. Bitcoin is not controlled by anyone and are produced by people all around the world using software that is able to solve mathematical problems.
You are able to use bitcoin to buy things electronically, but bitcoin is decentralized. This means that no single institution controls the bitcoin network, which means that a large bank is unable to control the money.
Bitcoin was created by a software developer called Satoshi Nakamoto. The idea behind the bitcoin currency was to create a currency that was independent of any central authority, could be transferred electronically with low transaction fees.
Bitcoin is created digitally by a community that anyone is able to join. Bitcoins are mined by using computer power in a distributed network. The network is also able to process transactions that are made with the virtual currency.
The rules that make bitcoin work say that only 21 million bitcoins can ever be created by miners. These coins can though be divided into smaller parts. The smallest divisible amount is one hundred millionth of bitcoin and this is named after Satoshi.
Bitcoin is based on math and the software programs that people use to create bitcoins follow a mathematical formula that is freely available. Also the software is an open source so that anyone is able to look at it and ensure that it is working.
There are various features of bitcoin that set it apart from normal currencies.
Bitcoin is not controlled by a central authority; instead each machine that mines bitcoin and processes transactions makes up part of the network and the machines work together. If a part of the network falters, the money still flows.
Bitcoin is simple to set up. You will need to create a bitcoin address and that’s it. Also there are no fees that need to be paid.
Users are able to hold multiple bitcoin addresses which aren’t linked to names, addresses or personal information. Bitcoin do store details of every transaction that is made in the network and is called a block chain. The block chain is able to tell a lot of information. If you have a publicly used bitcoin address, then anyone is able to see how many bitcoins are stored at the address.
When it comes to transaction fees, bitcoins are very low.
Transactions made with bitcoin are super-fast as you are able to send money anywhere and it will arrive in a matter of minutes. Once bitcoins have been sent there is no way you are able to get them back.