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What is Bitcoin?

What is Bitcoin?

Bitcoin is a digital currency that is rapidly gaining popularity because of it's ability to solve many of the issues that have long existed with other forms of currency. Invented in 2008 as a peer-to-peer payment system for online transactions, bitcoins are created and held electronically and can be used to buy goods and services or transfer money anywhere in the world. Bitcoin is the first currency to be a truly globally accepted asset, and there is no currency exchange, no minimums or limits, and it does not require a bank account to use.

How does Bitcoin work?

Unlike any prior payment system, Bitcoin is revolutionary in the fact that it is not controlled by any government. This designation allows for the achievement of possibilities that have been previously unattainable in the world of finance. Namely, due to the fact that no central authority is responsible for Bitcoin, it cannot be debased, controlled or otherwise used as a political tool. Since Bitcoin is also a peer-to-peer network, there is no need for a third party or middleman to facilitate transactions between a buyer and seller.

Instead of a central authority, the Bitcoin transaction network consists of computers around the world running the Bitcoin software, which operates the protocol for administering bitcoin transactions. That software can be downloaded and run by anyone, and any computer running the software can join the network. Each computer on the network also maintains a copy of the universal public ledger known as the blockchain.

How many bitcoins are out there?

Bitcoins are generated by being mined, a process where computers compete to run billions of calculations in order to help confirm transactions made on the blockchain. The miner is rewarded a small transaction fee according to a fixed formula. The last block of bitcoin will be generated in the year 2140 and will be at block number 6,929,999. After that block is mined, there will be slightly less than 21 million bitcoins in existence (20,999,999.9769 to be exact). 

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