What is Bitcoin
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 (Bitcoin Mining), using software that solves mathematical problems. It’s the first example of a growing category of money known as cryptocurrency.
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 is decentralized.
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.
This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules.
Those banks can simply produce more money to cover the national debt, thus devaluing their currency. Instead, bitcoin is created digitally, by a community of people that anyone can join.
Bitcoins are ‘mined’, using computing power in a distributed network.
This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network.
What are its characteristics?
Bitcoin has several important features that set it apart from government-backed currencies.
- 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 do in 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.
- it's anonymous
Well, kind of. Users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information. However…
- it's completely transparent
…bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain. The blockchain tells all.
- If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. They just don’t know that it’s yours.
- There are measures that people can take to make their activities more opaque on the bitcoin network, though, such as not using the same bitcoin addresses consistently, and not transferring lots of bitcoin to a single address.
- Transaction fees are miniscule
Your bank may charge you a £10 fee for international transfers. Bitcoin doesn’t.
- It’s fast
You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.
Setup Your Bitcoin Wallet
To buy, sell, store, send and receive bitcoin we need a bitcoin wallet. You can register and have your own bitcoin wallet for free in less than 5 minutes. From the wallet you will have your own bitcoin address. A bitcoin address will be a long string of seemingly random letters and digits for example like 18Yq8C5Z9MsDvizLbi4hAiXn3Wx7tuaxSV. When people want to send bitcoin to your wallet they simply copy and paste this bitcoin address and the amount of bitcoin they sent will be transferred directly to your wallet.
How to Cash Out Your Bitcoin
Most countries already had Bitcoin ATMs, the shops and stores that accept bitcoin as payment method (CHECK BITCOIN ATM LOCATIONS WORLDWIDE HERE). If your country or nearby places don't have these, don't worry you can exchange your bitcoin into dollars or other currencies with bitcoin wallet then just withdraw it to your bank account (Wire Payment or Credit/debit card withdrawal) or simply use the bitcoin wallet's prepaid debit card (Load the USD or other currencies balance from your bitcoin wallet to prepaid debit card). That prepaid debit card can be use in any ATM that support MasterCard or Visa.
Bitcoin Store
Bitcoin atms
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