Bitcoin is a digital currency, but what does that mean?
Bitcoin is a digital currency, but what does that mean? It means bitcoin isn’t physical or tangible. It’s a currency made for the internet, and therefore isn’t based on any physical bill or commodity. It is held in digital wallets that users can have almost anywhere--their smartphones, computers, or even flash drives. Users can use their wallets to quickly send and accept bitcoin payments of any size for a minuscule fee. Each bitcoin can be divided into hundreds of millionths, so there is no need to worry about owning a full one or getting exact change.
What are the advantages of Bitcoin?
Bitcoin gives people more power and control over their finances. Bitcoin’s minuscule transaction fees that result from its digital nature make it extremely cheap to send or accept. Furthermore, bitcoin’s anonymous nature eliminates the risk of fraud and identity theft that is always a concern for people making payments with credit cards. Simply put, bitcoin has all of the advantages of paying with cash, but can be used much more widely--notably, across international borders and electronically.
Who created Bitcoin?
Bitcoin was created by a person, or group of people, who go by the name Satoshi Nakamoto. The true identity of Nakamoto is not fully known, but he released all of his software publically so there are no concerns of its viability or legitimacy.
Who controls the Bitcoin network?
Just as no one owns or controls the internet, no one owns or controls the Bitcoin network. Bitcoin is a democracy of sorts. Any changes to the protocol must be used by the all of the Bitcoin users. Without consensus, a change to the software can not be made.
How does Bitcoin work?
The Bitcoin network helps disperse a public ledger called the "block chain". This ledger is a recording of all bitcoin transactions ever made. Your computer uses it to validate that the bitcoin you send and receive are not double spent. Bitcoin transactions are all “push”, meaning a payment must be authorized and sent. Bitcoin can not be pulled from your account, making it extremely secure.