What is Bitcoin?


Understanding Bitcoin

More and more Australians are becoming aware of something called “Bitcoin”, even though many of them aren’t quite sure what it is. Although a recent phenomenon, Bitcoin has already managed to capture the imaginations of many people from different backgrounds and from all walks of life. Bitcoin is somewhat a form of currency. It’s like currency in the sense that you can use it to buy goods or services at establishments which honor Bitcoin. In the past, there were not many companies which would be willing to accept it as a form of payment. However with each passing month, it seems that more websites are announcing that they are willing to receive it as payment.

Bitcoin seems like something rather complicated. In fact, a comprehensive explanation of what it is and how it works can get very technical. In a way, this just makes sense because it really is something quite revolutionary. Just think about all the currencies that have been in general circulation throughout the world. Currency is generally produced by governments. They have a monopoly on the right to print paper bills or churn out coins. There is a central government body in charge of the currency, such as a central bank. It controls how much money is printed and at times it acts to limit the amount of currency, depending on the state of the economy.

When it comes to Bitcoin, there is no government backing it. There is no central bank in charge of producing it. Instead, what you have is something that is essentially a decentralized currency. In fact, there is no one organization in charge. This is where the technical side comes in. Cryptology, the use of mathematical calculations and other safeguards are in place in order to make sure that no one person can simply produce more of this currency at will. The system’s complexity is there also in order to help ensure that this currency is more difficult hack, and to maintain the integrity of transactions.

It is possible to get involved with Bitcoin without necessarily understanding all the math, calculations and cryptology involved. You start by getting yourself a wallet on your computer or mobile device. This basically serves as a place to store the currency that you own. You can then get your hands on the currency in various ways. You can purchase the currency from someone else. Or you could be running a business and choose to accept Bitcoin as payment. As you accumulate the currency in your wallet, you can then use it to enter into transactions.

Your Bitcoin wallet will allow you to create addresses, which are similar to email addresses. These then allow you to send or receive the currency. One thing to take note of is that you should use each address only once. This helps to protect your privacy. That is one of the main benefits of this currency. It allows you to enter into transactions with others without necessarily having to divulge your identity. This currency excites a lot of people because it appears to be a way to harness the power of computing and the internet to decentralize something as central as money and currency.

To find out more about Bitcoin, click here.

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