Tuesday, September 26, 2017

What is Bitcoin?

Bitcoin is a new kind of money. It's the first decentralized electronic currency not controlled by a single organization or government. It's an open source project, and it is used by more than 1,000,000 people. All over the world people are trading hundreds of thousands of dollars worth of bitcoin every day with no middle man and no credit card companies. It's a start-up currency which has never happened before.

Bitcoin is the first digital currency that is completely distributed. The network is made up of users like yourself so no bank or payment processor is required between you and whoever you're trading with. This decentralization is the basis for Bitcoin's security and freedom.

Email let us send letters for free, anywhere in the world. Skype lets us make phone and video calls for free, anywhere in the world. Now there's bitcoin. Bitcoin lets you send money to anyone online, anywhere in the world for less than a cent per transaction! Bitcoin is a community run system not controlled by any bank or government. There's no wall street banker getting rich by standing between you and the people you want to send and receive money from.

Bitcoin is more efficient than all competing currencies. This will drive its adoption in the same way computers were adopted, in that computers made people more efficient in competing in the marketplace. A currency has value by it being widely used. Bitcoin is a start-up currency with a deflationary bootstrapping economy. Its use spreads by providing the speculator incentive.

Bitcoin is going to be the biggest opportunity for innovation that the world has seen since the industrial revolution. An idea whose time has come.

 

To help further elaborate on what Bitcoin is and how it works, here is a video from Khan Academy.

What is Bitcoin?

If you are looking for more, in-depth videos, please see our Further Study section.

Why Use Bitcoins?

Why is Bitcoin better as a medium of exchange than any other currency? Take a look at these use cases and consider your current alternatives. Bitcoin comes out on top every time.

  • Send emergency Bitcoins instantly to stranded family and friends abroad directly to their smartphone! No waiting for the bank to open, no $25 wire fees. Instant assistance!
  • Want to store a value of bitcoins securely for a long period of time. Generate Bitcoin keys off-line, print them, store them in a safe at your bank. Transfer Bitcoins to the off-line address and they are super secure until you need to spend them! Offline Bitcoins are not vulnerable to malicous software that may lurk on your computer.
  • Safer than a lemonade stand for kids to make their first earned money (more anonymous, no real world contact). They can sell their arts and crafts, like home made beads/necklaces/bracelets/etc.
  • Worried about making large transactions in public and having to safely transport the money to safety afterwards? Accept Bitcoins to your smart phone, then transfer them to your home computer or off-line Bitcoin address.
  • Your computer just failed to boot with a wierd error message. You Google it and discover a forum thread where someone already solved the problem and helps you get your computer back online. You decide to reward them by sending a few BTC to the Bitcoin address in their signature line as thanks for helping you get back to business.
  • Are you a merchant and tired of payment processor usage fees? Tired of dealing with fraud and chargebacks? Once the money is sent to you via Bitcoin, the transaction cannot be reversed.
  • Storing cash for a long period of time is not profitable because of inflation – a government’s printing of unbacked notes. After Bitcoin’s pre-programmed inflation period ends, it will begin to deflate due to attrition. Storing your coins for a long period of time may actually increase their value.

How can I get Bitcoins?

The easiest way to obtain Bitcoins is to receive them from another person. This can be done as an in-person trade, or you can accept Bitcoins for your business or service using BitPay merchant servicesLocalBitcoins.com is a great place to find local people willing to buy or sell Bitcoins.

Bitcoin ATMs are popping up everywhere now.  Check out this map to find one near you.

It is also easy to buy Bitcoins at a digital currency exchange. There are many online currency exchanges that let you buy and sell Bitcoins for US Dollars, Euros, Pounds, and many other currencies.

You can fund your exchange account with a electronic funds transfer.

 

Popular Bitcoin Currency Exchanges


(Atlanta)

CampBX.com
- Check, Money Order
- Wire Transfer


(San Francisco)

Coinbase
- Bank Transfer


(Moscow)
BTC-e.com
- SEPA Transfer
- Wire Transfer

(Slovenia)
BitStamp.net
- SEPA Transfer
- Wire Transfer

Bitcoin Wallets

Want to get started?  You'll need to get a Bitcoin Digital Wallet.

Your Bitcoin wallet is what allows you to transact with the world. It gives you ownership of Bitcoin addresses that you can use to receive coins from other users and then lets you send those coins onwards. Just like email, you can receive Bitcoins when you are offline, and all wallets are compatible with each other.

If you are brand new to Bitcoin, be sure to read what you need to know from bitcoin.org first.  Also, please read how to secure your wallet from bitcoin.org.

Get started fast and easy

If you are new to Bitcoin, these wallets are a good place to begin.

  • Bitcoin-Qt is an app you can download for Windows, Mac, and Linux.
  • Bitcoin Wallet for Android runs on your phone or tablet.

Be part of the Bitcoin network

Do you have a computer that you keep switched on all the time, that's connected to the Internet? You can help the community by simply running the original Bitcoin client on it. The original client is more resource intensive and will take a complete day to synchronize. After that your computer will contribute to the network by checking and relaying transactions.

Software Wallets

Software wallets are installed on your computer. They give you complete control over your wallet. You are responsible for doing backups and protecting your money.

 

Bitcoin-Qt

bitcoin-qtBitcoin-Qt
WindowsLinuxMac OS X

Bitcoin-Qt is the original Bitcoin client and it builds the backbone of the network. It offers the highest levels of security, privacy, and stability. However it has fewer features and it takes a lot of space and memory.

Visit Website

 

Multibit

multibitMultibit
WindowsLinuxMac OS X

Multibit is a lightweight client that focuses on being fast and easy to use. It synchronizes with the network and is ready to use in minutes. Multibit also supports many languages. It is a good choice for non-technical users.

Visit website

 

Armory

armoryArmory
WindowsLinux

Armory is an advanced Bitcoin client that runs on top of Bitcoin-Qt. Expanding its features for Bitcoin power users. It offers many backup and encryption features, and it allows secure cold-storage on offline computers.

Visit website

 

Electrum

electrumElectrum
WindowsLinuxMac OS XAndroid

Electrum's focus is speed and simplicity, with low resource usage. It uses remote servers that handle the most complicated parts of the Bitcoin system, and it allows you to recover your wallet from a secret phrase.

Visit website

 

Mobile and Web Wallets

Mobile wallets allow you to bring Bitcoin with you in your pocket. You can exchange coins easily and pay in physical stores by scanning a QR code or using NFC "tap to pay".  Web wallets allow you to use Bitcoin anywhere with less effort to protect your wallet. However, you must choose your web wallet service with care as they host your bitcoins.

Be careful

Web wallets host your Bitcoins. That means it is possible for them to lose your Bitcoins following any incident on their side. As of today, no web wallet service provide enough insurance to be used to store value like a bank.

 

Bitcoin Wallet

bitcoin walletBitcoin Wallet
AndroidBlackBerry OS

Bitcoin Wallet is a lightweight mobile client for Android and BlackBerry OS. This client does not need to be associated with any online service to work. It is compatible with QR code scanning and NFC.

Visit Google Play

 

Blockchain.info

blockchainBlockchain.info
AndroidiOS

Blockchain.info is an hybrid web wallet for mobiles. It is also available for iPhone in a restricted mode to fit Apple policies. It includes many blockchain.info features like web wallet backup.  It works great with Android.

Visit website

Visit Google Play

Subcategories

Learn more about Bitcoin with the Bitcoin Q&A at StackExchange