Bitcoin is a form of digital currency which is based on an
open source code that was created and is held electronically. Bitcoin is a
decentralized form of currency, meaning that it does not belong to any form of
government and is not controlled by anyone.
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.
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.
This is a yet another controversial topic. Because of the
freedom and the degree of anonymity that the use of Bitcoin offers, many users
who were seeking to purchase or solicit illegal goods or services initially
turned to the use of Bitcoin as a method of payment.
Again, when a user decides to use a specific type of
software for their Bitcoin wallet, they are deciding what direction the Bitcoin
network is heading towards. In other words, you need the cooperation of nearly
every single user in order to modify any aspect of the Bitcoin protocol.
Participants in Bitcoin transactions are identified by
public addresses – those are the long strings of around 30 characters you see in
a person’s Bitcoin address, usually starting with the numerals ‘1’ or ‘3’. For
every transaction, the sending and receiving addresses are publicly-viewable.
Bitcoins can be sold locally using LocalBitcoins, on Bitcoin
brokerages / exchanges, using two-way Bitcoin Teller Machines (BTM’s) or you can
pay for a good or service with them. Bitcoins can be sold to just about anyone
as long as they have a Bitcoin address, and can be sold for any fiat currency in
the world or traded for a physical good. Feel free to check out our recommended
list of exchanges and brokerage services to sell your bitcoins online.
