Frequently asked questions about Bitcoins

The term Bitcoins is still unknown to a lot of people, which is why probably the most common question related to this topic is “What are Bitcoins?”. Taking into consideration that the most popular answer to this is “some sort of virtual currency”, things are likely to get even more confusing. However, it is not that hard to understand what this digital currency is about and how you can make the best out of using it. The Bitcoin is the currency used by a virtual payment method within an international network that enables individuals (or businesses) to pay for goods and services, without actually using traditional money. The entire process is not centralized by any intermediary or institution, which is why Bitcoin payment is the first peer to peer procedure exclusively powered by its users.  To put it simply, it is like cash, but for internet usage. If the topic seems interesting to you, read on to learn the answers to some of the most frequently asked questions related to Bitcoins.

How can I acquire Bitcoins?

This is the main question of those interested in virtual trading. You can pay cash for Bitcoins, indeed, but the process of acquiring the digital currency is a bit more complicated. And for good reason, since it has to protect the identity and security of each user. You can purchase at a Bitcoin exchange, earn them through mining, and obtain them as payment for a good or service you provide. However, for beginners, the safest mean is by creating a virtual wallet, which can be either software or online based. You link it to your bank account, and pay with traditional money for Bitcoins.

Who created the Bitcoin System?

The first form of digital payment method was created by Wei Dai in 1998 and was called “cryptocurrency”. This was due to the fact that it was based on an encrypted system that enables virtual transactions and money control. Later on, the first mention of the Bitcoin network appeared in 2008, when Satoshi Nakamoto launched a concept that used mainly cryptography mailing. After that, the community contributed to perfecting his product, developing it so that it reached the form it has today.

How do Bitcoins work?

As far as the user is concerned, the system is just a mere product (like a mobile or computer app) they use to pay with value, but not with traditional money. The program offers its users a virtual wallet, by the means of which they can send and receive currency. From an external perspective, this is a short description of how Bitcoins actually work. However, this apparently simple process is backed up by a complicated network and an ensemble of pieces of software. Behind the scenes, although it seems that it is not regulated by anything (that would be impossible), the system shares a public ledger (some sort of registry), that verifies every transaction ever processed within it. This way, users can verify the legitimacy and authenticity of each one of their purchases or sells.

 

 

SHARE THIS POST

  • Facebook
  • Twitter
  • Myspace
  • Google Buzz
  • Reddit
  • Stumnleupon
  • Delicious
  • Digg
  • Technorati
Copy Protected by Tech Tips's CopyProtect Wordpress Blogs.