Please see below for a full list of FAQs (frequently asked questions).
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– What is Bitcoin?
Bitcoin is a digital form of currency that can be used for transactions between two parties without the need for a third party such as a bank. It is the first decentralised digital currency, with no central authority being responsible for its administration, but rather a digital ledger known as a blockchain records all transaction. Bitcoin was invented by an individual – or group of individuals – known as Satoshi Nakamoto in 2009.
– Why is there so much fuss about Bitcoin?
There has been a great deal of interest in Bitcoin from the media and early adopters. Bitcoin was originally seen as a potential solution to the problems brought about by the financial crisis of 2008, in that it does not have any central control so would not be at risk from a bank collapsing for example.
It also has considerable utility as a form in international payment, as transfers can be made instantly and there are virtually no fees. In addition, its price has risen dramatically from just a few cents to over $5,000, leading to considerable interest from speculators and investors.
– Can I buy things with Bitcoin?
More and more merchants are accepting Bitcoin as a method of payment, meaning you can buy things with Bitcoin just as you would with normal fiat currency. Subway, Microsoft, Expedia, Whole Foods, Shopify and over 100 other retailers now accept Bitcoin as a method of payment.
– How can I get some Bitcoin?
Bitcoin can be obtained in exchange for fiat currency via a number of online exchanges such as Blockchain.info, Coinbase, Bitstamp and others.
– What if I can’t afford to buy a whole Bitcoin?
Don’t worry, Bitcoin can be bought in fractions (called Satoshis) so you don’t need to have over $5,000 to get hold of some Bitcoin. You can buy just a few dollars worth if you like.
– Where do I store my Bitcoin?
Your Bitcoin is stored in a wallet, either online with a password and additional security measures and secure encryption, or an offline wallet such as Trezor.
– Who invented Bitcoin?
Bitcoin was invented in 2009 by Satoshi Nakamoto, the true identity of whom is unknown. It has been speculated that Nakamoto is in fact a group of people rather than just one person. An Australian named Craig Wright claimed to be Nakamoto in 2016, but this has been widely disputed.
– What are cryptocurrencies?
Cryptocurrencies, of which Bitcoin is one, are digital currencies that use cryptography to secure transactions. They are also referred to as altcoins and virtual currencies. Bitcoin was the first but there are now hundreds of cryptocurrencies performing a variety of different functions.
– What is Ethereum?
Ethereum is a decentralised platform for smart contracts. It is run on a blockchain that prevents fraud and interference. It offers the potential of organisations and people using its platform to agree and sign contracts, store registries of debts or promises, create markets or transfer funds securely.
It could potentially have thousands of other uses as it allows people to create “apps” on its platform, much as can be done with ios and Android. Ethereum was set up the Ethereum Foundation, a Swiss nonprofit, in 2014.
– What is a Blockchain?
A blockchain is an immutable ledger of records that are linked together via cryptography. A group of records over a certain period of time form a block and each block is the linked to the previous one, thus forming a continuous “chain.”
For example this chain could be a list of transactions, with a timestamp, transaction data and a hash pointer to the previous record. The records are verified by each computer in the network, meaning they are extremely difficult – many say impossible – to hack.
Blockchains are seen as having great utility for verification purposes, whether it be financial transactions, contracts, debts, public records, health records, food traceability, ID verification and much more due to their secure nature, immutability and decentralized nature.
The original blockchain was that set up for Bitcoin.
– Can I trade cryptocurrencies?
Cryptocurrencies such as Bitcoin are notoriously volatile and have therefore proved to be ideal vehicles for traders. Many have rocketed in value whilst others have risen and fallen. The trading of cryptcurrencies is in its relative infancy when compared to other mediums such as forex, commodities and shares, but there are some strategies being developed and we test some of them here on the site to see if any of them work.
– What is an ICO?
ICO stands for Initial Coin Offering and it is when a new cryptocurrency is launched and the people behind it want to raise funds. ICOs have become increasingly popular in recent times as many hundreds have launched and investors have been eager to participate. However, it should be noted that ICOs are largely unregulated at this time and therefore some have been accused of being fraudulent and scams. Before investing in an ICO, you should undertake careful due diligence and research on those behind it and only invest funds you can afford to lose all of.