What is Bitcoin?

Bitcoin is a digital or virtual currency that uses peer-to-peer technology to facilitate instant payments. Bitcoin is unique in that there are a finite number of them: 21 million.

Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.

How does Bitcoin work?

Bitcoin is not just a digital currency, it is a distributed ledger system, or blockchain, that enables the use of digital currencies. Bitcoin works by using cryptography to control the creation and transfer of money, rather than relying on central authorities.

Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.

What are the benefits of Bitcoin?

Bitcoin has several benefits over traditional currency.

1. Bitcoin is decentralized, meaning it is not subject to government or financial institution control.

2. Bitcoin is global, meaning it can be used by anyone, anywhere.

3. Bitcoin is secure, thanks to cryptography.

4. Bitcoin is transparent, meaning anyone can see transactions on the blockchain.

5. Bitcoin is fast and inexpensive to use.

6. Bitcoin is deflationary, meaning its value increases over time.

What are the risks of Bitcoin?

Bitcoin is still a relatively new technology and has yet to be adopted by the mainstream. As such, there are risks associated with its use.

1. Bitcoin is volatile, meaning its value can fluctuate greatly.

2. Bitcoin is unregulated, meaning its use is not protected by government or financial institution regulations.

3. Bitcoin is anonymous, meaning it can be used for illegal activities.

4. Bitcoin is unsecure, because its cryptography is not yet perfected.

5. Bitcoin is slow and expensive to use, due to its limited processing capacity.