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What is Bitcoin and How Does it Work? The Ultimate FAQ

The ultimate FAQ to know what is bitcoin. How to use bitcoin and all the necessary basics to make BTC as your preferred mode of payments.

What is Bitcoin?

Bitcoin is a peer-to-peer, electronic cash system that works on the Bitcoin network. It is an online, decentralized, cashless currency, with a focus on anonymity, the untraceability of its owner, peer-to-peer transactions, and financial independence. The technology behind Bitcoin is decentralized, meaning transactions are processed by the community. It is an immutable, digital currency that operates without a centralized authority or middleman. There are two main benefits of using bitcoin: Bitcoin’s native coin value is divisible: Every 10 minutes, Bitcoin reduces its currency value by a given percentage and releases new coins to be able to maintain its value.

How does Bitcoin work?

The long and short of it is that it uses the Blockchain technology to create a decentralized public ledger of all the transactions that happen around the bitcoin network. Every node (a computer running the bitcoin software) on the network needs to update the entire ledger. The mainframe computers, those using blockchain technology are called nodes and the peer to peer system users are called transistors. An interesting thing is that everyone can join the bitcoin network and do transactions. The only requirement to do transactions is to install the bitcoin client. Once your bitcoin client is installed it is mandatory to open your bitcoin wallet and deposit your coins (bitcoins).

Who created Bitcoin?

The most confusing question to a lot of people. Bitcoin was founded in January of 2009 and later become popular when the first ever “Bitcoin Talk” started. What is Bitcoin? Bitcoin is a cryptocurrency which works like a real currency and works on the same principle. In our above example we are taking bitcoins as a payment, not money as everyone uses it, in fact there are quite a few people who don’t use any of it for any purposes. It’s all about the value of it and the fees involved. What Is its purpose? The most difficult part about a crypto-currency, because it’s not one of these currencies that you can spend but keep and hold onto for a long time. It’s a currency that is good to use and also has some value. How is it different from other currencies?

What are the key benefits of using Bitcoin?

Anonymity Transactions are executed anonymously and complete transfers are protected. Transactions are executed anonymously and complete transfers are protected. Easy to use The bitcoin protocol is easy to understand. With just a few clicks, anyone can make a transaction and make a payment. The bitcoin protocol is easy to understand. With just a few clicks, anyone can make a transaction and make a payment. Future Proof Bitcoin is secure. There are no third parties, no website and no service or software required for payments. Bitcoin is secure. There are no third parties, no website and no service or software required for payments. Safe and Secure Bitcoin uses cryptography and strong encryption to protect transactions.

Who accepts Bitcoin as a form of payment?

There are several online stores that accept bitcoin and accept BTC as a form of payment. Do you have to have bitcoins to be able to spend them? No, bitcoin is free to be spent for any goods or services anywhere and anytime. How to Get started When do I need bitcoins? Buying bitcoin is not hard; but first and foremost you need to be in possession of bitcoins, and you need to be able to spend them, and you need to be online, so you can use the exchange service you choose. You can either buy bitcoins using real cash or by using a payment service like an online payment wallet. How do I get my hands on bitcoins? There are several ways to obtain bitcoins: Buy it from an online merchant. That is the most common.

How do you buy and sell bitcoin?

To buy bitcoin, head over to bitcoin.local or run a "bitcoin wallet" on your computer or phone. That means opening a website on your computer and authenticating yourself. (Read More: CoinDesk Daily Dose) Also, first do a full set of security to protect your bitcoins. Read More: How to Buy Bitcoins and Secure Your Wallet To sell bitcoin, you need a marketplace like LocalBitcoins.com. In order to get bitcoins, you'll have to transfer bitcoins from your private wallet and sell it on LocalBitcoins.com. (Read More: What is LocalBitcoins.com? Bitcoin: A First Look Inside LocalBitcoins.com) In order to start buying bitcoins or sell them, you need an e-wallet account. This will be an online wallet to store your bitcoins.

The future of bitcoin!

I used to think of bitcoin as the future. Now I'm a member of the the "B team". What is the future of bitcoin? I don't care anymore. Real Money Remember that most people get into bitcoin for the wrong reasons. Why? They want to make easy money off their friends, family, and acquaintances. Some use bitcoin as an investment vehicle. Sometimes people just don't get that bitcoin is about money and can't think straight when they come to the real world. Most people don't have a clue what they are doing and end up getting burned. "The short term will be exciting. The long term will be tough." - Satoshi Nakamoto What will you do with your bitcoins? The Story of bitcoin starts with an economist.


Please feel free to comment. Bitcoin is a serious innovation that is taking over the world in a big way. However, it is still a very immature project and has a long way to go before it can be more mainstream. It is also an extremely difficult task to define, because bitcoins are not easy to come by. At the moment, it is safe to say that bitcoin is very easy to mine, there is more than enough for everyone and there is no way to counterfeit it.

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