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Latest revision as of 09:30, 26 October 2017
What is Bitcoin?
Bitcoin is a decentralized cryptographically-secure digital currency created by Satoshi Nakamoto. Peer-to-peer transactions are nearly instant, very low cost, with no risk of counterfeiting or chargebacks. No banks or middle-men are required. Bitcoin is finite and not controlled by a governing body that can continue to print more of it, thus diluting its value. Bitcoin is the internet of money.
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 the Blockchain?
The blockchain is a distributed public ledger that is hosted by computers all around the world. Every bitcoin transaction that occurs can be verified by reviewing the blockchain. Bitcoin miners are constantly creating new blocks containing new transactions, and by reviewing these transactions we can establish how much bitcoin is being stored at any public address and at any point in time.
What is a Bitcoin Public Address?
A bitcoin public address is a long sequence of numbers and case-sensitive letters that starts with the number 1 or 3. Bitcoin is spent by using a wallet to send the amount to a public address. To receive bitcoin transactions, the public address must be shared with the sender. Public addresses can be generated various ways, and there are a huge quantity of possible addresses. Public addresses should not be used repeatedly because doing so affects the privacy of everyone transacting with that address. What is a Bitcoin Private Key?
A private key is what allows bitcoin to be sent from one public address to another. It can be helpful to think of a private key as a 'password' that unlocks the funds stored at the corresponding public address. If the owner loses the private key, then the funds cannot be recovered. For this reason, it is incredibly important to understand that keeping private keys secure is absolutely critical. There are several ways for a private key to be lost or compromised, and there are several ways to prevent that from happening. They require the owner to be quite diligent about digital security when dealing with large sums.
What is a Bitcoin Wallet?
A wallet in regards to Bitcoin is a software program that manages public addresses and their corresponding private keys. There are several software wallets to choose from, each with their own strengths and weaknesses. There are also hardware wallets, such as Trezor, Case, and others, which allow users to sign transactions using a USB device for added security. Some wallets are simply a piece of paper containing one or more keypair. Paper wallets, when generated properly, are one of the most secure ways to store bitcoins for extended periods of time, which makes them a popular choice for 'cold storage' i.e. not connected to the internet at all.
What is Double Spending?
Double-Spending is the act of using the same bitcoins twice. There is only a 21 million set cap on the protocol and no more can be produced. So the network protects against double spend by the verification of each recorded transaction. The blockchains ledger ensures that the transactions are finalized by its inputs confirmed by miners. The confirmations make each unique Bitcoin and its subsequent transactions legitimate. If one tried to duplicate a transaction the original blocks deterministic functions would change showing the network that it is counterfeit and would not to be accepted.
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.
How Can You Buy Bitcoin?
Bitcoins can be bought from various sources. You can purchase them online using an exchange or brokerage service that will enable you to buy Bitcoin with a bank transfer using fiat currency, a credit card, and some services also offer buying opportunities using Paypal. Bitcoin can also be purchased locally using LocalBitcoins, and from Bitcoin Teller Machines which are similar to cash ATMs that you find worldwide.
Bitcoin.com offers a recommended list of current online exchanges and brokers who sell bitcoins. You can also buy Bitcoins instantly using your credit card on Bitcoin.com (The service is provided by Simplex). Our aim is to provide the best quality services via our website so anyone can easily obtain the cryptocurrency from a wide array of respected Bitcoin buying/selling platforms.
Why Trust Bitcoin?
Bitcoin is a network operating by the three foundational principles of technological freedom: Decentralization, Open Source code, and true Peer-to-Peer technology. Bitcoin’s trust is based on the subjective valuations of human faith in mathematical algorithms, encryption and numbers. With the three pillars of technological principles Bitcoin’s blockchain is a peer-reviewed system of integrity.
Is Bitcoin Legal?
Bitcoin is legal in most jurisdictions in the world but there are a small number nation states that have banned its use, such as Ecuador. Wikipedia has a great guide on how Bitcoin is treated in all the countries around the world and explains regulatory policies surrounding it. Regulations vary from one border to the next so you should always research your location’s laws before participating in the network.
What Is A Full Node?
Bitcoin transactions need more than just miners to validate and relay across the network. Full nodes are maintained by individuals, groups and organisations all around the world and broadcast all the messages within the protocol. Full nodes are a second layer of security for the Bitcoin network and operate in an altruistic manner meaning they work without reward. The use of full nodes increases the networks vitality and reduces double spending immensely.