Bitcoin is a digital currency that can be used by anyone to easily send payments worldwide. It is designed to be decentralized and peer-to-peer (P2P), meaning there is no government, bank or company that can control or manipulate it. They cannot create new bitcoins to devalue your money, they cannot prevent you from spending your money, they cannot take your bitcoin or charge outrageous fees for using the Bitcoin network. Bitcoin works globally and is functioning 24/7 with no downtime.
Where did bitcoin come from?
In 2009, an unknown person or entity named ‘Satoshi Nakamoto’ released bitcoin as an open source software, which was proposed as a global electronic payment system based on mathematical proof. The idea is too remove the middle man (banks and government) from finance and provide a method for people to send fast and frictionless payments. If you are interested in specifics, Satoshi detailed the proposal in the Bitcoin Whitepaper.
Who makes bitcoins?
Bitcoin has a controlled supply that no one can change. The bitcoin protocol has a set of rules that determines how many bitcoins will be created and when that will happen. All bitcoins are generated at a predetermined rate and distributed fairly to bitcoin miners who help process your transactions and keep the network secure. The rate at which bitcoins are produced is cut in half every 4 years which means will eventually no new bitcoins will be created. This process will take until the year 2140 and there will be a maximum of 21 million bitcoins. The next bitcoin halving will take place mid 2016, the supply rate will drop from 25 to 12.5 bitcoins per block, which means with growing demand the price for bitcoin will likely skyrocket some time in 2016.
Why should I use bitcoin?
- Bitcoin is decentralized, which means there no authority with jurisdiction over your money. You don’t have to fill out a form for the bank or government when you send money overseas. There is no limit to how much bitcoin you can send. No one can stop you from spending it or freeze your account. No one can print new bitcoins or create fraudulent coins, the bitcoin network will reject them.
TL;DR NO CAPITAL CONTROLS – you truly own your money.
- Completely transparent. You don’t have to worry about where your money is. The blockchain keeps a public record of every bitcoin transaction and you can check your balance anytime just by knowing your bitcoin address. You never wait or get approval to spend your money.
- Bitcoin is fast. You can send and receive payments almost instantly. The public record is automatically updated worldwide every 10 minutes, 24/7, so you can verify your transaction in real-time. No more waiting for the bank to open or for checks to process.
- The fees are negligible! It can cost over $10 to have banks send money overseas, and ATM withdrawal fees can be $3+ each. With bitcoin you pay a small fee (.0001 BTC) currently about $0.04 USD to send any amount of money worldwide and know they will have it in about 10 minutes. The small fee goes directly to the bitcoin miners who work hard to process your transaction quickly and efficiently.
- No Chargebacks – Once the bitcoin miners confirm a transaction it is set in stone on the blockchain. You don’t have to worry about credit card fraud, checks bouncing, or any other reversal or seizure of your money. No central authority means no worries.