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- What is Bitcoin?
- Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
It’s the first example of a growing category of money known as cryptocurrency.
- What makes it different from normal currencies?
- Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.
However, bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it isdecentralized. No single institution controls the bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money.
- Who created it?
- A software developer called Satoshi Nakamoto
- What are its characteristics?
- Bitcoin has several important features that set it apart from government-backed currencies.
1. It's decentralized
The bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together. That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown – or simply decide to take people’s bitcoins away from them, as the Central European Bank decided to doin Cyprus in early 2013. And if some part of the network goes offline for some reason, the money keeps on flowing.
- It's easy to set up
- Conventional banks make you jump through hoops simply to open a bank account. Setting up merchant accounts for payment is another Kafkaesque task, beset by bureaucracy. However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable.
- Transaction fees are miniscule
- Your bank may charge you a £10 fee for international transfers. Bitcoin doesn’t.
6. It’s fast
You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.
- Where to Buy and Sell Bitcoin
- Coinbase operates one of the most popular wallets and is an simple way to buy bitcoin. $5 bonus on sign up.
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