What is Bitcoin?

Bitcoin is a cryptocurrency and a payment system, first proposed by an anonymous person or group of people under the name Satoshi Nakamoto in 2008. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. 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.

What is a Bitcoin Wallet?

A Bitcoin wallet is a software program where bitcoins are stored. Bitcoin wallets are used to store Bitcoin balances and to facilitate transactions.

What is Bitcoin Mining?

Bitcoin mining is the process by which new Bitcoin are generated. Miners are rewarded with bitcoins for each block of transactions they verify. As of February 2015, the reward was 25 bitcoins per block. The reward halves every four years.

What is a Bitcoin Exchange?

A Bitcoin exchange is a website where users can buy and sell bitcoins. Bitcoin exchanges are used to trade bitcoins for other currencies and vice versa.

What is a Bitcoin Transaction?

A Bitcoin transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin transactions are verified by Bitcoin miners.

What is Blockchain?

The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This allows bitcoin wallets to calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. Bitcoin miners are rewarded with transaction fees and newly created bitcoins for verifying and adding transactions to the block chain.

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