- 1. What is bitcoin?
- Bitcoin is a worldwide cryptocurrency and digital payment system called the first decentralized digital currency, as the system works without a central repository or single administrator.
- 2. Who created Bitcoin?
- It was invented by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto and released as open-source software in 2009
- 3. Who controls the Bitcoin network?*
- No one controls it, it is its own entity.
- 4. How does Bitcoin work?*
- The system is peer-to-peer, and transactions take place between users directly, without an intermediary.
- 5. Do a lot of people use Bitcoin?
- Yes they do! Millions of people are using Bitcoin and other crypto currencies and the number of users grow each day.
- 6. How does someone acquire Bitcoin?
- There are several ways you can buy Bitcoin – Bitcoin exchange, individual sellers, Bitcoin ATM (Bitcoin ATMs work like a regular ATM, except they allow you to deposit and withdrawal money so that you can buy and sell Bitcoin.)
- 7. Is it difficult to make Bitcoin payments?
- It isn’t, it is extremely easy through your wallet, takes seconds to do.
- 8. What are the advantages of Bitcoin?
- You being in control of your own money is the #1 advantage, and then being able to send and receive money anywhere in the world to anyone instantly. Also there are low transaction costs.
- 9. Are there any disadvantages of Bitcoin?
- It is relatively unknown still to a lot of the world so it isn’t widely accepted at your local Macy’s for example, and Bitcoin is still volatile as there are limited coins and the supply/demand changes all the time (but it mostly increases.)
- 10. Can I trust Bitcoin? Why?
- Bitcoin is extremely secure and allows you to be in control of your money so that no external entity can charge fees or restrict you from doing anything with the bitcoin you accrue.
- 11. Can I make money with Bitcoin?
- Yes you can, just like a currency on the foreign exchange market its value can fluctuate and can be traded based on that. It is actually three times the price the gold, and if you were to have bought some Bitcoin a few years ago you’d be a multimillionaire now.
- 12. Is Bitcoin anonymous?
- Yes it is completely anonymous, only you and whoever you decide to send to know your address, and even then addresses change all the time to keep security and anonymity. Plus wallets have several security measures to make sure only you have access to your wallet.
- 13. Can Bitcoin become a major payment method?
- It can be yes, after accumulating Bitcoin over time you can use it to make purchases by either selling/withdrawing it from your wallet to your bank account or with some other wallets, you’re able to link a debit card to your wallet. It is being used by Mercedes-Benz, Lamborghini, overstock.com, and several other retailers.
- 14. Can Bitcoin be regulated?
- No, it among other crypto currencies are not regulated now and it is in the review process by various governments on how to regulate it. It is decentralized, no one controls it as it is its own entity.
- 15. How are Bitcoins created?
- Bitcoins are created with various softwares and then mined by large computer servers.
- 16. Is Bitcoin a Ponzi scheme?
- Not at all, Bitcoin is operated independently for everyone to use and no one to take advantage off of others.
- 17. Why does Bitcoin have value?
- Because like any other currency in the world, say for example the USD, the value of it changes all the time based on value of other currencies and other assorted reasons. Also when you take into account the law of scarcity, there’s an extremely low supply and a high demand.
- 18. What is a Bitcoin wallet?
- Let’s talk about Bitcoins Wallets. To make it simple we’ll compare it to email.If you want to receive Bitcoins you’ll need a unique personal address, just like an email. Let’s call this address your Bitcoin address, and just like your email address anyone can see it and anyone can send Bitcoins to it.
Now you decide that you want to access your Bitcoin address to see how many Bitcoins you own. Well, if this were your email you’d first go to your email program – like Gmail or Outlook. The same program exists for Bitcoin and it’s called a “Bitcoin Client”.
So you’ve opened up your Bitcoin Client, and now you need to log in. For email you’d enter your email address and password. When accessing your Bitcoin program you will need to enter your Bitcoin Address and “private key”.
It’s important to know that every Bitcoin address has only 1 matching private key. But each private key can be used for multiple addresses. Just think about it this way, each email address has only 1 password that opens it. But you can use the same password for multiple email addresses.
It’s crucial that you keep the combination of your Bitcoin address and private key safe. Exactly like you’d guard your combination of email address and password. Some people write it down on a piece of paper and hide it away, others store it in an encrypted file on their computer, there are also dedicated websites that hold your private and public keys for you. Any place that these 2 pieces of information are stored at is called a Bitcoin Wallet. Even if you decide to memorize your Bitcoin address and private key by heart, it will mean that your brain is your Bitcoin wallet.
Today most programs act as a Bitcoin client and a Bitcoin wallet together. For example, Blockchain.info will store you public and private keys and also allow you to send out Bitcoins. That’s it! You now know what a Bitcoin wallet is.
- 19. Can I turn my Bitcoin into a physical coin?
- Yes you can convert bitcoin into physical cash.