What is Bitcoin?

Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. 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 often called the first cryptocurrency, although prior systems existed. Bitcoin is more correctly described as the first decentralized digital currency. Bitcoin works in a way that allows users to hold, spend, and trade it without the need for a third party.

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.

Bitcoins can be exchanged for other currencies, products, and services.

What is Ethereum?

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference.

Ethereum is unique in that it allows for the creation of decentralized applications.

What is a Cryptocurrency?

A cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control.

What is Bitcoin Mining?

Mining is how new Bitcoin and Ethereum are created. Miners are rewarded with cryptocurrency for verifying and committing transactions to the blockchain. Ethereum miners are rewarded based on their share of work done, rather than their share of the total number of blocks mined.

What is a Blockchain?

A blockchain is a public ledger of all cryptocurrency transactions. It is constantly growing as "completed" blocks are added to it with a new set of recordings. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Bitcoin nodes use the block chain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

What is a Wallet?

A cryptocurrency wallet is a software program that stores private and public keys and allows users to send and receive digital currency and monitor their balance.