What is Bitcoin?

Bitcoin is virtual currency. Instead of paying for a product or service with cash, check or credit card, a user pays over the Internet through a peer-to-peer, decentralized fashion. The payment network through which a user pays treats the transaction as cash.

How does Bitcoin work?

The intricate “how” of using bitcoin is already taken care of through existing software cryptography. You need only concern yourself with getting started.  The way to do so is by getting a wallet. Just as you need to store paper money in a wallet, you’ll need to store your bitcoins in a wallet on your computer or mobile phone.

Bitcoin wallets serve as both the origin and destination of digitally signed bitcoin transactions. Since transactions are peer-to-peer, if need be, you can trace them back to where the bitcoins were first produced.

To adapt to a world of bitcoin commerce, you should understand that bitcoins are not physical entities – like dollars, yens, euros, or pounds. There are only digitized records of transactions. Bitcoins are not coins or paper bills you stuff inside a handbag or a leather wallet. Once you understand bitcoin as a transaction — and a documented addition to your personal wealth — you can appreciate how you can easily invest or set up an IRA in bitcoin, just as you can use it to buy a product or service.

Who uses/accepts Bitcoin?

Since the dollar is now the world’s reserve currency and has been around since 1794, you’ll of course find it has wider acceptance than bitcoin. Still, because of bitcoin’s advantages and its potential as an investment, it’s gaining increasingly faster acceptance. Some of the well-known businesses that accept bitcoin might surprise you, for example: Amazon.com, Target, CVS, Subway, Overstock.com, Whole Foods and many others.

According to CoinDesk, as of the second week in January 2016, bitcoins are bought and sold in almost 13,000 cities in 249 countries throughout the world. Because of its portability and efficiency of processing, bitcoin is ideal for large transactions.

Bitcoin is virtual currency. Instead of paying for a product or service with cash, check or credit card, a user pays over the Internet through a peer-to-peer, decentralized fashion. The payment network through which a user pays treats the transaction as cash.

Is there a first user or inventor of bitcoin?

Not really. In 2008, a man named Satoshi Nakamoto published a paper on the Internet that describes bitcoin software. In 2009, he also released the first software to initiate the bitcoin network. Since that time though, others have refined Nakamoto’s bitcoin software. There’s a good chance that the Nakamoto name is a pseudonym inasmuch as he (or she) would certainly have a strong vested interest in anonymity.

Does any one person or organization control bitcoin transactions?

No. There is no bank, central authority or intermediary through which a bitcoin transaction is “cleared.” Transactions are entirely anonymous and peer-to-peer.

How are transactions verified and recorded?

Transactions are strictly recorded over a computer network and recorded in a public ledger known as a block chain. The ledger records each bitcoin as a single unit

How many cities and countries now recognize bitcoin for currency transactions?

According to coinbase.com, currently 13,000 cities in 249 countries worldwide recognize bitcoin.

What is a bitcoin wallet?

A bitcoin wallet refers to an app on your computer or mobile phone which stores bitcoins much as the wallet in your pocket or handbag stores dollars. To complete a transaction online, you need to go into your wallet for a specific number of bitcoins.

What are the advantages of using bitcoins over checks and credit cards to make a purchase?

Your transactions clear much faster. You don’t have to wait for bank holidays or credit-card merchants’ delayed processing protocols. International wire transfers frequently take days to clear. Also, your transaction is more secure due to the reduced possibility of hacking. With bitcoin, your processing fee is much less expensive. And so is the merchant’s processing fee.

Is it safe to invest in Bitcoin?

Bitcoin has a strong cryptography; it verifies transactions in the same way banks and government applications use encryption to do so. Through the underlying technology of bitcoin, called crypto currency, bitcoin provides an outlet for wealth without restrictions or confiscation.

Once you have purchased bitcoins, you’ll have a secret unit of information called a key, which automatically signs each of your transactions. This signature is mathematically unique and provides proof you authorized your transactions. It also prevents anyone from changing your transactions in any way.