What are Bitcoin
Bitcoin is a currency that runs on the internet. There is no bank or central entity that control its movement or emission. Anyone can participate in Bitcoin and there’s no approval needed to start using Bitcoin. Bitcoin is a borderless, trustless and decentralized payment system that no government can censored or regulate.
Does Bitcoin has value?
Bitcoin get value from its utility. Because Bitcoin is the first currency to allow people to do monetary transaction without a central authority, it became very popular very quickly. The value of Bitcoin went from a few cents when it started in 2009 to thousand of dollars today.
As long as people can keep using Bitcoin and find utility in it, it will stay valuable. Currently, many businesses and startup are working to create more use cases for Bitcoin which will further increase Bitcoin value.
Is Bitcoin secure?
Bitcoin transaction are secured by miners. Miners use very specialized hardware to find the solution to a mathematical problem. The only way to find the solution is to guess repetitively different solution. The difficulty is adjusted every 2016 blocks so if the hardware become a lot better at finding solution, the difficulty increase. This ensure that the network stay secure at all time.
The total amount of computing power securing the network is called hashrate and it has ben increasing steadlily over the past few years. In the past 2 years, the hashrate increased more than 10x.
There’s currently more computer power securing Bitcoin than Google, amazon and Facebook have together. So we can say that Bitcoin network is very safe. As it’s value increase, more miners will want to join the network increasing the security even more.
How do Bitcoin work?
Bitcoin works because of the ingenuity of the blockchain behind it. Simply put, the blockchain is Bitcoin. The blockchain is a succession of blocks. A new one get added to the chain every 10 minutes. That is where the name “blockchain” come from.
On each new block, all the transaction made in the past 10 minutes are recorded and stored on that block forever. So if you want to see any past transaction, you can simply find the block on which your transaction was recorded and you’ll see the sending address, the receiving address and the amount sent.
So the blockchain is simply a ledger with all the Bitcoin transactions recorded on it since the beginning of time. Having this secured open ledger ensure that you cannot spend twice the same Bitcoin. All the Bitcoins are always all accounted for.
Does Bitcoin can be hack or stolen?
Each newly generated Bitcoin address are public but they are all protected by a private-key. Only the person who created the address has access and know that private-key. As long as you are the only person to know the private-key to your address, your Bitcoin are safe.
If you put your bitcoin in someone else custody like on an online exchange, then someone can hack the exchange find the private key of the address on which your bitcoin are stored and transfer them away. But if you follow standard security practice to protect your Bitcoin like using a cold wallet to store them, your Bitcoin are safe at all time.
How many Bitcoin can be created
There’s currently just over 16 million Bitcoins in circulation. New Bitcoin are generated every block and given to the miners to incentivize them to protect the network. New Bitcoin will be generated and given to the miners for every new block until we reach the hard coded limit of 21 millions Bitcoin.
In 100 years, when we reach the limit of 21 million Bitcoin created, no more Bitcoin will be given to miners. Instead, miners will be incentivized by receiving a transaction fee paid by the users on every transaction they do.
Who created Bitcoin?
Bitcoin was created by Satoshi Nakamoto and was officialy released on January 3 2009.
Satoshi Nakamoto is a sobriquet and the real identity of the creator of Bitcoin is still unkown today. The last known reply from Satoshi Nakamoto was in 2011 and since then, no one ever heard of him again.
Today, the group of people who help maintaining and improving Bitcoin code are know as the Bitcoin core-developers.
How do Bitcoin transaction work?
To make a transaction on the bitcoin network, you simply need to have some Bitcoin and know the address of someone else’s wallet.
- You login to your Bitcoin wallet
- Enter the receiving address in your software
- Press send, et voila!
You can send a few dollars or millions of dollars at once. There’s no rules or limitation when using Bitcoin. As long as the transaction is valid, which means you possess the private key of an address who has Bitcoin on it and you are sending to a valid address, no one can stop this transaction to happen or reverse it. That is the power of Bitcoin.
Where can I spend Bitcoin
There is a saying in economy that says: Bad money drives out good money. This means that people will hoard the good money, the one that tend to keep or increase in value and use the less valuable money, the one that tend to depreciate in value. Bitcoin is considered good money because its value has been increasing dramatically over the past 8 years. So people who own Bitcoin usually wants to store it instead of spending it. But there’s still a few places where you can spend your bitcoin.
For example, on purse.io you can purchase things on Amazon for up to 20% discount using Bitcoin. Other store are accepting Bitcoin and the list is growing daily. But at the moment, the main purpose of Bitcoin is a store of value.
Who control the Bitcoin network?
The bitcoin network is controlled by no one in particular. It is a decentralized network and anyone can participate in it. You can mine Bitcoin without anyone permission just by buying a miner hardware or coding your own.
You can also turn your laptop into a node and become one of the thousands of node that host the Bitcoin blockchain around the world. If you know how to code, you can even participate in improving the code of bitcoin by becoming a Bitcoin-core contributor.
So no one really control Bitcoin and anyone can start participating and improving the Bitcoin network.
Can Bitcoin be forged or counterfeit?
It is impossible to counterfeit Bitcoin. All transactions are forever registered on the blockchain and every Bitcoin are accounted for and recorded on the immutable blockchain. The miners will only accept a transaction if the private keys that secure the address is the correct one. So there’s no way to counterfeit Bitcoin. If a miner start accepting erronous transaction, his blocks are not accepted by the network and just thrown out.
Do i need a permission to use Bitcoin?
You don’t need anyone’s permission to use Bitcoin. In comparison, If you want to write an application for the current banking industry, you need the authorization of the bank on which your application will be deployed. With Bitcoin, you can write your application, deploy it on the Bitcoin ecosystem and start using it alone or with millions of people for free without anyone’s permission.
Furthermore, if you want to open a bank account at your local bank, you’ll need to bring your identification or even worse, if you don’t have access to a bank like Billions of un-banked people in the world, you are out of luck. With Bitcoin, you don’t need identification and you don’t need approval. All you need is access to an internet connection to start receiving, sending and using Bitcoin. Everyone can be part of the Bitcoin economy. This is the power of Bitcoin.