http://www.coindesk.

com/information/what-is-bitcoin/

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins arent printed, like dollars or euros
theyre produced by people, and increasingly businesses, running computers all around the world, using software that solves
mathematical problems.

Its 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, its like conventional dollars, euros, or yen, which are also traded
digitally.

However, bitcoins 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
cant control their money.
Who created it?

A software developer called Satoshi Nakamoto proposed bitcoin, which was an electronic payment system based on mathematical
proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with
very low transaction fees.
Who prints it?

No one. This currency isnt 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.
So you cant churn out unlimited bitcoins?

Thats right. The bitcoin protocol the rules that make bitcoin work say that only 21 million bitcoins can ever be created by miners.
However, these coins can be divided into smaller parts (the smallest divisible amount is one hundred millionth of a bitcoin and is
called a Satoshi, after the founder of bitcoin).
What is bitcoin based on?

Conventional currency has been based on gold or silver. Theoretically, you knew that if you handed over a dollar at the bank, you
could get some gold back (although this didnt actually work in practice). But bitcoin isnt based on gold; its based on mathematics.
Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical
formula is freely available, so that anyone can check it.

The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to.

What are its characteristics?

Bitcoin has several important features that set it apart from government-backed currencies.

1. It's decentralized
The bitcoin network isnt 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 cant tinker with monetary
policy and cause a meltdown or simply decide to take peoples 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.
2. 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.

3. It's anonymous
Well, kind of. Users can hold multiple bitcoin addresses, and they arent linked to names, addresses, or other personally identifying
information. However

4. 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 dont know that its
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.

5. Transaction fees are miniscule

Your bank may charge you a 10 fee for international transfers. Bitcoin doesnt.

6. Its fast
You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.

7. Its non-repudiable
When your bitcoins are sent, theres no getting them back, unless the recipient returns them to you. Theyre gone forever.

So, bitcoin has a lot going for it, in theory. But how does it work, in practice? Read more to find out how bitcoins are mined, what
happens when a bitcoin transaction occurs, and how the network keeps track of everything.

What is Bitcoin?

With the Bitcoin price so volatile everyone is curious. Bitcoin, the category creator of blockchain technology, is the World Wide
Ledger yet extremely complicated and no one definition fully encapsulates it. By analogy it is like being able to send a gold coin via
email. It is a consensus network that enables a new payment system and a completely digital money.

It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. Bitcoin
was the first practical implementation and is currently the most prominent triple entry bookkeeping system in existence.
 ualize and Download High-Resolution Infographic

Who created Bitcoin?

The first Bitcoin specification and proof of concept was published in 2009 by an unknown individual under the pseudonym Satoshi
Nakamoto who revealed little about himself and left the project in late 2010. The Bitcoin community has since grown exponentially.

Satoshi's anonymity often raises unjustified concerns because of a misunderstanding of Bitcoin's open-source nature. Everyone has
access to all of the source code all of the time and any developer can review or modify the software code. As such, the identity of
Bitcoin's inventor is probably as relevant today as the identity of the person who invented paper.

Who is involved in Bitcoin?

Over $1B of investment into Bitcoin and blockchain companies has taken place resulting in thousands of companies and hundreds of
thousands of individuals involved from around the world.

What is the Blockchain?

Who controls the Bitcoin network?

Nobody owns the Bitcoin network much like no one owns the technology behind email or the Internet. Bitcoin transactions are
verified by Bitcoin miners which has an entire industry and Bitcoin cloud mining options. While developers are improving the
software they cannot force a change in the Bitcoin protocol because all users are free to choose what software and version they use.

In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work
correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this
consensus.

How does Bitcoin work?

From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and
enables a user to send and receive bitcoins.

Behind the scenes, the Bitcoin network is sharing a massive public ledger called the "block chain". This ledger contains every
transaction ever processed which enables a user's computer to verify the validity of each transaction. The authenticity of each
transaction is protected by digital signatures corresponding to the sending addresses therefore allowing all users to have full control
over sending bitcoins.

Thus, there is no fraud, no chargebacks and no identifying information that could be compromised resulting in identity theft. To learn
more about Bitcoin, you can consult the original Bitcoin whitepaper, read through the extremely thorough Frequently Asked
Questions, listen to a Bitcoin podcast or read the latest Bitcoin news.

Sponsors for free Bitcoins

Many people new to Bitcoin are curious about how to get some. Bitcoin faucets, places where bitcoins are given away for free, have
been a part of spreading Bitcoin since the earliest days. But one problem is running out of bitcoins to give! That is why we have
figured out a sustainable way to give away free bitcoins with sponsors.

https://www.weusecoins.com/