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Key pointsBitcoin is a digital currency known as a cryptocurrencyThe peer-to-peer technology underpinning it is known as the blockchain a public ledger of all transactionsBitcoins can be stored in a digital wallet and used to Purchase other currencies or real world goods

Where once a single bitcoin has been worth a few cents it's now worth about $9,200 per coin (November 2017), creating millionaires in the process.There have been many reported cases where individuals mined thousands of relatively useless bitcoins as a hobby years ago, only to now realise they're rich.One IT employee even threw out a hard drive containing 7,500 bitcoins.

All this is done with no central authority or bank.Who created itBitcoin and also the blockchain technology was made by someone under the pseudonym of Satoshi Nakamoto and released as a working beta in 2009. Satoshi's true identity remains a puzzle as he disappeared from the scene in 2010 after seemingly handing over the reins to Gavin Andresen, the chief scientist in the Bitcoin Foundation.Over the years numerous individuals have claimed to be Satoshi, including Australian computer scientist Craig Wright.

Once the limit is reached, no longer bitcoins can be made.However, a single bitcoin can be subdivided as far down as the decimal place (0.00000001BTC) to buy smaller goods using only a fraction of the coin.How would you shop or send bitcoinYou can shop and send bitcoins from an encrypted electronic wallet, which can be run as a program on your computer.The wallet functions with two keys that a private key and a public key which seem like a seemingly random string of numbers and letters.The private key is kept confidential by you and functions as a password that unlocks the wallet and allows you to send any bitcoins associated with it.

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In case the website gets hacked or someone gets your login details that they can get and drain your funds from the exchange.There is no way for a transaction to be reversed or recovered if a burglar sends your bitcoins for their wallet.After buying your coins you should transfer them to a secure digital wallet created by you and not hosted online.You can even write down the wallet's private key on a piece of paper (that is known as a newspaper wallet) and stick it in a safe.If you don't save the private key on your computer or online then hackers can never break in and get your funds.

Bitcoin means different things to different individuals. For many, it is a future of freely moving currency untied to any central bank. To others, it is a purely electronic entity of questionable worth and doubtful origin. But what's Bitcoin, in the most elementary senseIn most casual conversations, you can get away with knowing that bitcoin is, basically, an electronic currency.

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In reality, it is two much more complicated things.Bitcoin has been with us since 2009, when a person (or group) under the pseudonym Satoshi Nakamoto introduced a stage (Bitcoin, uppercase) that hosts an electronic currency (bitcoin, lowercase). Bitcoin the stage is built on the concept of evidence of work data which is expensive and time-intensive to produce but can be readily verified.

To mine a bitcoin, a computer must finish a complicated algorithm, essentially going through the work of an extensive calculation in exchange for some newly minted currency. That bit of digital currency is worth whatever the market determines through supply and demand.Transactions are connected to a users Bitcoin speech, which is stored on its own general ledger, known as the blockchain.

This relative anonymity makes the system appealing for things such as incognito purchases over the internet.A key component of Bitcoins blockchain is the simple fact it is an open, distributed ledger. Throughout the distributed nature of the ledger, the transactions on the blockchain are verified by the consensus of Extra resources each member, offering protection and trust with no third-party overseer.One of the most important things to keep in mind when thinking about what Bitcoin (or even bitcoin) is: that there is no single answer.