What Is BitCoin

What is BitCoin and where can I mine them? BitCoin are digital currencies and the supply of which is currently limited to 21 million bitcoins. They were introduced in 2009 by an anonymous person, under the pseudonym Satoshi Nakamoto, and the first ever transaction was for $1. How does BitCoin work? BitCoin can be exchanged for fiat currencies such as the US Dollar, Euro, Yen, or even a gift card. You can buy goods or services with it just as if you were using another currency. The entire BitCoin economy has value only because people believe it has value. If no one had faith in it, it would be worthless. Where can I get BitCoin? BitCoin can be bought and sold in exchange for another currency but cannot be exchanged for US dollars or Euros. There is a market for buying and selling BitCoin around the internet and exchanges are available on many different sites. The exchange rates fluctuate with demand so use your best judgement in deciding what to buy and sell. How much BitCoin can I buy with BitCoin? The price of one BitCoin is currently about $420. Some sites also offer BitCoin 'mine' options for those who want to be involved with the creation of the currency. How much BitCoin can I send? There is a limit of 1,000 BitCoin that you can send per transaction. How does BitCoin avoid the so-called double-spend problem? The problem with BitCoin is that if someone wants to spend the same BitCoin twice, he will be blocked from doing so. The way BitCoin resolves this is to simply add two small extra digital signatures to every BitCoin transaction. They are called 'public keys', and these allow for someone to prove that he owns a BitCoin. For example, suppose someone buys a BitCoin from you. The public key is something that he can copy and give to someone else if he wants to spend it twice. If he tries to spend it two times, he will be blocked from doing so. The system works like this: you send him the BitCoin and give him the BitCoin public key. He must copy the public key and give it to someone else if he wants to spend the BitCoin. You will then only get the BitCoin that he gave you if he gives you the public key that he used when you gave him the BitCoin. This simple fix avoids double spending as any attempted double spend will have to pass two safeguards, and the sender cannot also be used to double spend the BitCoin. As a result, if you have a BitCoin private key, you can be certain that no one else will be able to spend it. There is also a public key that anyone can share with you if they need your BitCoin. When do I get BitCoin? Your BitCoins will come in 12 blocks of 50. This means that on average you can expect a block to be released every ten minutes. You can also expect a block to be 'mining ready' for a few weeks before you start to see BitCoins being released into the system. What do I do with BitCoins? At the moment, you can't convert your BitCoins to any other currency. You can, however, send your BitCoins to another person using BitCoin transaction messages. You can also spend them on websites which accept BitCoins as a form of payment. If I sell my BitCoins, will I get some back? No. You lose BitCoins. As you pay for goods or services, you simply give the seller the BitCoin that you used to pay for them. There is no way to 'recoup' the BitCoin that you paid for your goods or services. They're essentially a virtual currency with no real world assets or functions, as such it makes little sense to think about them as having any real value. Can I make a profit on BitCoins? BitCoin was only launched in 2009 so there are still many people out there who are yet to purchase BitCoins. There are currently many websites which offer the chance to make a profit on the BitCoins that you purchase. Read the FAQs before deciding whether to take any offer. What happens to BitCoin if it is stolen? Bitcoins can be lost or stolen. For example, if your private keys are stolen from you, you are unable to recover your BitCoins. This is because the Bitcoins used to make payments are all held by you and cannot be spent by anyone else. The average time to report a lost or stolen BitCoins is a couple of days and you are able to prevent your coins from being spent. You may want to keep your private keys in a safe place, or on a hard disk, to prevent someone from stealing your BitCoins. BitCoin vs. PayPal When PayPal was launched in 2000, the website used conventional methods to transfer money between two parties. This meant that both parties had to have an account with PayPal in order to do any transactions. As an example, if I wanted to pay someone in US Dollars, I would first have to first deposit US Dollars into my PayPal account. The money would then be transferred between me and the person I wanted to pay. Nowadays, with PayPal's UK arm PayPal.com, payments are transferred almost instantaneously without having to have an account. This is great for people who do not want to have an account. The only problem with this system is that it is easily influenced. Just recently, for example, there was an incident whereby UK companies were prompted to accept PayPal payments before they had even heard of it. It was suggested that PayPal was used to trick UK businesses into using the service. This, in turn, led many UK businesses to go on to follow suit and start accepting PayPal payments. BitCoin is different. Payments made with BitCoin can be made by anyone. They can even be made by companies to one another. In fact, BitCoin is often compared to a "peer-to-peer" payment system. This is great, as it makes the entire process a lot more democratic, since anyone can participate without needing to go through a third party like PayPal. In order to pay someone with BitCoins, you simply have to have their wallet address - the number in which they store their BitCoin. They need to have a BitCoin wallet in order for you to be able to send them BitCoins, and they do not need to be a member of a BitCoin company. This means that BitCoins are accessible to businesses, users and anyone else who wishes to participate in this amazing digital payment system. So is BitCoin a scam or something useful? The best way to answer this is to check the URL that you will send your payment. Typically, you will need to enter a credit card number. These cards are protected by VISA and MasterCard, two of the world's biggest credit card companies. However, sometimes these companies change their policies, and this means that you could end up paying a huge amount for a simple purchase that you would normally be able to complete for a fraction of the price. This is why it is so important to read the terms and conditions to see whether you are legally bound to the contract. Many companies are also using "vishing", or unsolicited telemarketing calls. This means that the companies are calling their victims pretending to be from a trusted company, but in fact, they are stealing your details, enabling them to steal your money and use your credit cards. It is therefore vital that you check your PayPal account and report any suspicious transactions immediately. For more information on how to deal with scammers and how to avoid them, click here. What is the purpose of a private key? A private key is a 16 character string which is used to access your BitCoins. Each Bitcoin wallet contains a series of private keys, which represent a specific amount of Bitcoin. For example, a wallet containing 100,000 BitCoins would be represented by a