FAQ

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 in digital form. The process involves specialized computers solving algorithmic equations or hash functions. These problems help miners 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.

This is 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.

Bitcoins can be sold locally using LocalBitcoins, on Bitcoin brokerages / exchanges, using two-way Bitcoin Teller Machines (BTMs) 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.

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.