What is Bitcoin? Bitcoin is a virtual currency or a means of electronic exchange that is used to acquire products and services like any other currency. Bitcoin is the gateway to a world of possibilities that promises to transform social, economic and political relations again.
What is the difference between Bitcoin and other currencies?
As a currency, it can serve all that any currency serves, but instead of having a government entity — like a central bank — that issues and supports it, it is entirely based on the digital system that was devised by its creator, Satoshi Nakamoto, in 2009: the blockchain or chain of blocks. If you don’t know what is Bitcoin and what makes a big difference with the so-called fiat coins (those emitted and backed by a central bank), you should know that it does not exist in physical form. It is a digital currency that only exists in the form blockchains and sophisticated process of the transaction verification.
How do users manage their bitcoins?
What is Bitcoin and and how it’s used? Users can manage their funds with digital purses that have either a public key (equivalent to a bank account number) or a private key (equivalent to the bank account password). With both, it is possible to make financial transactions from anywhere in the world and always. For the average user, the operation of Bitcoin is very simple. Bitcoins are managed with a mobile or desktop application that can be downloaded at no cost, and from there transactions are made, usually free of charge, although the procedure is usually expedited by paying a small commission which may vary depending on the congestion of the network, the size of the transaction and the urgency of the user. The most common thing is to wait about 10 minutes to receive between 3 and 6 confirmations that validate the transaction.
How is the bitcoin emitted?
What is Bitcoin and what’s the mechanism of it? The real money is emitted from a central bank, which gives it its value and distributes it in the country. Bitcoin, on the other hand, does not come from a bank but is originated by a procedure that can be carried out by any user with the necessary equipment, called Mining.
In mining, every computer or specialized hardware solves complex mathematical problems approximately every ten minutes, creating a new ‘block’ of information on the network — the database that is the Blockchain in which they are registered and therefore validate the transactions made with the currency. As a reward, the so-called ‘miners’, those who bring their computing power to create new blocks, obtain some bitcoins in exchange for this service.
Read our previous post on What Makes Bitcoin So Volatile