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 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.

As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.[12]

To receive a Bitcoin, a user must have a Bitcoin address – a string of 27-34 letters and numbers – which acts as a kind of virtual post box. Since there is no registry of these addresses, people can use them to protect their anonymity when making a transaction. These addresses are in turn stored in Bitcoin wallets, which are used to manage savings.

Wallets can be stored on a computer or mobile phone. The coins themselves are dedicated to the addresses and can never exist outside of the Blockchain network.

When someone sends you Bitcoins, they are essentially signing off ownership of the coins to your wallet’s address. To be able to spend those coins and unlock the funds, the private key stored in your wallet must match the public key the currency was sent to.

If it does, then the transaction is authenticated and processed.

A transaction fee is like a tip or gratuity left for the miner.

So how do you get Bitcoins? You can buy them on an exchange like Coinbase.com ![1] , or you can earn them through a process known as “mining.

” Mining is when you use your computer to process Bitcoin transactions and secure the network. As an incentive for doing this work, every once in awhile you will receive a portion of new Bitcoins as your reward.