What is Bitcoin?
Then Lucky Faucet told the story. Bitcoin is a payment
system introduced as open-source software in 2009 by developer Satoshi Nakamoto.
The payments in the system are recorded in a public ledger using its own unit of
account, which is also called bitcoin. Payments work peer-to-peer without a
central repository or single administrator, which has led the US Treasury to
call bitcoin a decentralized virtual currency. Although its status as a currency
is disputed, media reports often refer to bitcoin as a cryptocurrency or digital
Bitcoins are created as a reward for payment processing work in which users
offer their computing power to verify and record payments into the public
ledger. Called mining, individuals or companies engage in this activity in
exchange for transaction fees and newly created bitcoins. Besides mining,
bitcoins can be obtained in exchange for fiat money, products, and services.
Users can send and receive bitcoins electronically for an optional transaction
fee using wallet software on a personal computer, mobile device, or a web
Bitcoin as a form of payment for products and services has seen growth,and
merchants have an incentive to accept the digital currency because fees are
lower than the 2-3% typically imposed by credit card processors. The European
Banking Authority has warned that bitcoin lacks consumer protections. Unlike
credit cards, any fees are paid by the purchaser not the vendor. Bitcoins can be
stolen and chargebacks are impossible. Commercial use of bitcoin is currently
small compared to its use by speculators, which has fueled price volatility.
Bitcoin has been a subject of scrutiny amid concerns that it can be used for
illegal activities. In October 2013 the US FBI shut down the Silk Road online
black market and seized 144,000 bitcoins worth US$28.5 million at the time. The
US is considered bitcoin-friendly compared to other governments. In China,
buying bitcoins with yuan is subject to restrictions, and bitcoin exchanges are
not allowed to hold bank accounts.
If you want to know more then check out the full Bitcoin
Wikipedia article or watch the YouTube video below.