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What is Bitcoin?
A global currency based on distributed computing instead of gold and banks.
Bitcoin (BTC) is a currency, that is:
or state controls
All transactions are
How do you use Bitcoins?
FILL IT WITH BITCOINS
With wire transfer or cash $,£,€, etc...
people in person
At current exchange rates
You can do this by...
Collect block reward
Store your Bitcoins!
Your Bitcoins are stored in
ANONYMOUS ONLINE ADDRESSES.
Each address is like a glass safe:
everybody sees what’s inside but only you hold a private key to open it and spend. Addresses and private keys are long sequences of letters and numbers.
Your BTC address #1
Balance BTC 0.01
Your BTC address #2
Balance BTC 0.02
Your BTC address #3
Balance BTC 3.00
Your BTC address #n
Balance BTC 2.00
Private key #1
Private key #2
Private key #3
Private key #n
*People can see the address but not who owns it. So your identity can remain anonymous, if you choose.
Everybody can see
Only you can see
Spend your Bitcoins
for goods and services
for other digital currencies
Use your BTC address #
and your private key #
Approve transfer to seller’s address
Checks the transfer has been carried out correctly. Here's how it happens:
Everybody can see if the transfer is legitimate
No one sees your personal data or private key
Takes over 10 minutes
CARRIED OUT THROUGH MINING
The transaction is encrypted
(turned into a long sequence of numbers)
The transaction is included into a ‘block’ with all other transactions of the past 10 min.
Thousands of computers (the network) verify the transactions of the block using a mathematical formula.
When all transactions are confirmed, a block is ‘mined’
Transaction gets recorded in the ‘block chain’, the general ledger of legitimate transactions.
SO THE BTC TRANSACTION IS:
(no credit card data)
(You can’t spend same BTCs twice)
Miners may reap trans. fee: 0-0.01% of transaction value
Miners share fix reward of 25 BTC/mined block.
NUMBER OF BTCs IN CIRCULATION INCREASES
(UNTIL A MAX. OF 21 MILLION COINS)
* The Hash Rate is a metric that shows how many computations per second the whole Bitcoin network is currently making.