Bitcoin is the world’s first decentralized digital currency. Bitcoin is different than any currency you’ve used before, so it’s very important to understand some key points.
Who makes it?
This currency isn’t physically printed in the by a central bank like dollars, or euros. Those banks can simply produce more money to cover the national debt, thus devaluing their currency.
Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are ‘mined’, using computing power in a distributed network. You can think of this distributed network like a ledger, where every transaction ever made is written down and stored.
This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network.
Unlike government issued money that can be inflated at will, the supply of Bitcoin is mathematically limited to twenty one million bitcoins and that can never be changed. However, these coins can be divided into smaller parts (the smallest divisible amount is one hundred millionth of a bitcoin and is called a ‘Satoshi’, after the founder of bitcoin).
Who controls it?
No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems. This is what is meant by the term decentralized.
Who created it?
In late 2008 a cryptographer 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. No one knows who Satoshi is, or was, and so there is an air of mystery surrounding this issue.
What is bitcoin based on?
Many years ago conventional currencies were 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). However, 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. This process is called mining and it becomes progressively harder over time so that know only specialised computers known as ASICs are the only ones capable of mining bitcoins in any meaningful timeframe.
The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to.
Where to Buy and Sell Bitcoin
|
Exchange |
About |
Based | |
 |
Coinbase operates one of the most popular wallets and is an simple way to buy bitcoin. $10 bonus on sign up. |
USA | |
 |
Localbitcoins matches buyers and sellers online and in-person, locally worldwide. |
Finland | |
 |
Cex.io claims to be one of the fastest ways you can buy bitcoin. |
USA | |
 |
Coinmama allow purchases with credit and debit cards for verified users. |
Israel | |
 |
Paxful enables you to buy from paypal, and you can use Amazon gift cards too. |
USA | |
 |
Bitit.io you can Bitcoin in 50 countries, with a credit card or cash. |
France |