What is Bitcoin?
It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority. Basically, no interference of banks.
What are bitcoins?
It’s a virtual currency and does not exist in physical form.
What is the Blockchain?
The blockchain is a decentralized network of all Bitcoin users that essentially checks and records every transaction. New transactions are gathered up into a group called a block. Each new block references the one before forming a chain.
At present, the block chain is about 65GB and growing every 10 minutes.
Who is Satoshi Nakamoto?
No-one knows. The name Satoshi Nakamoto is definitely a pseudonym and might represent a single person or, more likely, a group of people.
What is a bitcoin address?
A Bitcoin address is a long string of 27 – 34 numbers and letters that acts similarly to an email address. The address enables the Bitcoin blockchain to recognize when bitcoins are sent and received.
What’s the current total number of bitcoins in existence?
There are 21 million bitcoins present.
How does one acquire Bitcoins?
– As payment for products or services.
– Purchase bitcoins at a Bitcoin exchange.
– Exchange bitcoins with someone near you.
– Earn bitcoins through competitive mining.
- What Is a Bitcoin Wallet?
A Bitcoin wallet is an application that stores, sends and receives bitcoins. The most common wallets are smartphone-based and use the device’s camera to scan QR codes to save the user from needing to copy/paste long Bitcoin addresses. Others have desktop versions or use browser-based wallets. To the end user, the interface is similar, though the way they function and handle private keys (the ‘key’ which allow you to spend your bitcoins) and user privacy can be very different.
- How do bitcoin transactions work?
To send bitcoins, you need two things: a bitcoin address and a private key. A bitcoin address is generated at random and is simply a sequence of letters and numbers. The private key is another sequence of letters and numbers, but unlike your bitcoin address, this is kept secret.
- What Is a Public Key?
Every Bitcoin address contains both a public and a private key. The public key allows others to send bitcoins to your address and verifies the signature of the transaction to ensure everything is in order and finalizes the transaction.
- What is a Private Key?
The private key, allows you to ‘unlock’ and spend your bitcoins. It does this by signing transactions, which tells the Bitcoin network that you are the owner of the address in which the bitcoins are held and that the transaction is valid. Whoever holds the private key for a Bitcoin address is able to spend the bitcoins which that address holds, so your private key is essentially the key to the safe which is holding your bitcoins.
- What if I receive a bitcoin when my computer is powered off?
The bitcoins will appear next time you open your wallet application. Bitcoins are not actually received by the software on your computer, they are appended to a public ledger that is shared between all the devices on the network. If you sent bitcoins when your wallet client program is not active and you later launch it, it will download blocks and catch up with any transactions it did not already know about, and the bitcoins will eventually appear as if they were just received in real time. Your wallet is only required when you want to spend bitcoins.
- What is Double Spending?
Double-spending is the act of using the same bitcoins twice. Due to the limited amount of supply of bitcoins, the network protects against double spending, by the verification of each transaction.
- What Is a Full Node?
Bitcoin transactions need more than just miners to validate and relay across the network. Full nodes are maintained by individuals, groups, and organizations all around the world and broadcast all the messages within the protocol.
What is Bitcoin Mining?
Bitcoin mining is analogous to the mining of gold, but its digital form. The process involves specialized computers solving algorithmic equations or hash functions. These problems help miners to confirm blocks of transaction held within the network.
What do I need to start mining?
Anybody can become a Bitcoin miner by running software with specialized hardware. Mining software listens for transactions broadcast through the peer-to-peer network and performs mathematical tasks to process and confirm these transactions. Bitcoin miners perform this work because they can earn transaction fees paid by users for faster transaction processing, and newly created bitcoins issued into existence according to a fixed formula.
Is there any transaction fees?
Sometimes. Transaction fees are calculated using various factors. Some wallets let you set transaction fees manually. Any portion of a transaction that isn’t picked up by the recipient or returned as change is considered a fee. This then goes to the miner lucky enough to solve the transaction block as an extra reward.
Is Bitcoin secure?
Bitcoin has gained a reputation as an extremely safe technology with a strong record for security and privacy. It does not require you to input any of your personal information when making a transaction.
All Bitcoin transactions are done using two keys – a public key, visible to everyone, which is your Bitcoin address and a private key that is only known to you. When sending Bitcoin, a combination of your public and private keys together is your signature.
- What happens when bitcoins are lost?
Lost bitcoins still remain in the blockchain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to obtain their private key(s) that would allow them to be spent again.