What is Bitcoin?

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About a week ago, the FBI shut down the Silk Road site, which was a hub for nefarious and illegal activity. I had never visited the site which requires the anonymity enhancing TOR browser, but the news article mentioned something that sparked my interest, “millions in Bitcoins seized.” Was that a lot? What is Bitcoin and what are they worth anyway? Then I saw another article that showed a picture of Bitcoins in hard currency form – were Bitcoins minted somewhere? My curiosity was peaked and I’ve spent about a week learning more about this fascinating, experimental, cyber currency.

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I took a few hacks at it, but the best definition I found came from Wikipedia (but requires a bit more explaining):

Bitcoin

(sign: (B with 2 vertical lines, similar to a $) code: BTC or XBT) is a cryptocurrency where the creation and transfer of bitcoins is based on an open-source cryptographic protocol that is independent of any central authority.

Cryptocurrency

refers to currency that uses cryptology and a network to function and remain secure. You could also call it an electronic payment system. It cannot be easily hacked or cheated. In fact there is only one case of system ever failing, and it recovered gracefully with no adverse impacts.

..based on an open-source cryptographic protocol that is independent of any central authority

refers to the fact the currency isn’t printed anywhere or backed by any central authority or government.

If a currency is only as strong as the authority backing it, how does Bitcoin function without a central bank? And do they ever “create” more currency when demanded? It turns out, the Bitcoin creators took care of all this by creating a program which manages itself in a distributed manner, and incentivizes people to voluntarily power this network. At this point, all I had were more questions and you might too. You can continue below or I’ve provided some quick links if you want to learn more about certain specifics.

The Bitcoin.com video about what Bitcoin is. You might have questions after watching it like I did.

Background Information:
Who runs Bitcoin? Could it turn off one day?
Is Bitcoin safe and I how do I know I won’t get cheated?
So are Bitcoins real or can I print my Bitcoins out?
Is Bitcoin a good investment to make? What’s the short and long term outlook?

Practical Information:
How can I buy Bitcoin?
How can I earn Bitcoins?
How can I mine Bitcoin on Windows or setup a multiple device mining rig?

– Or –

Take me to the next section –>

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