What is Bitcoin?

Bitcoin is a form of digital currency, created and held digitally. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re created by people,  running computers all around the world, using software that solves mathematical problems.

What makes it different from other currencies?

Bitcoin can be used to buy things electronically. In that sense, it’s like regular dollars, euros, or yen, which are also exchanged digitally nowadays.

However, Bitcoin’s most essential characteristic, and the thing that makes it different to regular money is that it is decentralized. No single institution controls the Bitcoin network. This puts some people at comfort since it means that a large bank can’t control their cash.

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.

Who prints/create them?

No one. This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. 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.

This network also processes transactions made with the virtual currency, efficiently making bitcoin its own payment network.

 What is Mining?

Mining is the process of generating bitcoins. Once achievable with nothing more than a single, CPU (central processing unit) based, home computer, it has now become a multi-billion dollar industry and a complicated, expensive, process involving equipment with short life expectancy with no further value past its shelf life. Due to the high costs of equipment, manufacturing, and power consumption, profit margins on bitcoin mining vary and not profitable during certain times of increased difficulty, high power costs, and technological performance roadblocks for less efficient mining organizations.

You can learn more about mining here.

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