Who created it?
A software developer called Satoshi Nakamoto
proposed bitcoin, which was an electronic payment system based on
mathematical proof. The idea was to produce a currency independent of
any central authority, transferable electronically, more or less
instantly, with very low transaction fees.
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What is Bitcoin Mining?
What is Bitcoin Mining? Have you ever wondered how Bitcoin is generated?
This short video is an animated introduction to Bitcoin
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Who created Bitcoin?
Bitcoin is the first implementation of a concept called
"cryptocurrency", which was first described in 1998 by Wei Dai on the
cypherpunks mailing list, suggesting the idea of a new form of money
that uses cryptography to control its creation and transactions, rather
than a central authority. The first Bitcoin specification and proof of
concept was published in 2009 in a cryptography mailing list by Satoshi
Nakamoto. Satoshi left the project in late 2010 without revealing much
about himself. The community has since grown exponentially with many developers working on Bitcoin.
Satoshi's anonymity often raised unjustified concerns, many of which
are linked to misunderstanding of the open-source nature of Bitcoin. The
Bitcoin protocol and software are published openly and any developer
around the world can review the code or make their own modified version
of the Bitcoin software. Just like current developers, Satoshi's
influence was limited to the changes he made being adopted by others and
therefore he did not control Bitcoin. As such, the identity of
Bitcoin's inventor is probably as relevant today as the identity of the
person who invented paper.
What makes it different from normal currencies?
Bitcoin can be used to buy things electronically. In that sense, it’s
like conventional dollars, euros, or yen, which are also traded
However, bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized.
No single institution controls the bitcoin network. This puts some
people at ease, because it means that a large bank can’t control their
What are its characteristics?
Bitcoin has several important features that set it apart from government-backed currencies.
1. It's decentralized
The bitcoin network isn’t controlled by one central authority. Every
machine that mines bitcoin and processes transactions makes up a part of
the network, and the machines work together. That means that, in
theory, one central authority can’t tinker with monetary policy and
cause a meltdown – or simply decide to take people’s bitcoins away from
them, as the Central European Bank decided to do in Cyprus in early 2013. And if some part of the network goes offline for some reason, the money keeps on flowing.
2. It's easy to set up
Conventional banks make you jump through hoops simply to open a bank
account. Setting up merchant accounts for payment is another Kafkaesque
task, beset by bureaucracy. However, you can set up a bitcoin address in
seconds, no questions asked, and with no fees payable.
3. It's anonymous
Well, kind of. Users can hold multiple bitcoin addresses, and they
aren’t linked to names, addresses, or other personally identifying
4. It's completely transparent
…bitcoin stores details of every single transaction that ever
happened in the network in a huge version of a general ledger, called
the blockchain. The blockchain tells all.
If you have a publicly used bitcoin address, anyone can tell how many
bitcoins are stored at that address. They just don’t know that it’s
There are measures that people can take to make their activities more
opaque on the bitcoin network, though, such as not using the same
bitcoin addresses consistently, and not transferring lots of bitcoin to a
5. Transaction fees are miniscule
Your bank may charge you a £10 fee for international transfers. Bitcoin doesn’t.
6. It’s fast
You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.
7. It’s non-repudiable
When your bitcoins are sent, there’s no getting them back, unless the recipient returns them to you. They’re gone forever.
So, bitcoin has a lot going for it, in theory. But how does it work, in practice? Read more to find out how bitcoins are mined, what happens when a bitcoin transaction occurs, and how the network keeps track of everything.
What is bitcoin based on?
Conventional currency has been based on gold or silver.
Theoretically, you knew that if you handed over a dollar at the bank,
you could get some gold back (although this didn’t actually work in
practice). But bitcoin isn’t based on gold; it’s based on mathematics.
Around the world, people are using software programs that follow a
mathematical formula to produce bitcoins. The mathematical formula is
freely available, so that anyone can check it.
The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to.
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Though a relatively new concept, bitcoin ATMs are growing in number.More are on the way, from a number of different vendors including BitAccess, CoinOutlet, Genesis Coin, Lamassu and Robocoin.Like a face-to-face exchange but with a machine, you insert your cash and either scan your mobile wallet QR code or
receive a paper receipt with the codes necessary to load the bitcoins onto your wallet.Exchange rates vary, and may be anything from 3% to 8% on top of a standard exchange price.Keep up with the latest bitcoin ATM news and also view the locations worldwide on our bitcoin ATM map.
Buying bitcoins is not always as easy as newcomers expect. The good news is the number of options is increasing, and it is getting easier all the time.Some may not even necessarily require a wallet or Internet access. Other ideas have included bitcoin debit cards, physical bitcoin 'coins' with a wallet value pre-loaded, and stored-value cards.