OK, so what's Bitcoin?
David Zimbeck explains that it's not an actual coin, it's "cryptocurrency," a digital form of payment that is produced ("mined") by lots of people worldwide. It allows peer-to-peer transactions instantly, worldwide, for free or at very low cost.
This currency is not backed by a tangible commodity (such as gold or silver); bitcoins are traded online which makes them a commodity in themselves.
Bitcoin is an open-source product, accessible by anyone who is a user. All you need is an email address, Internet access, and money to get started.
Where does it come from?
Bitcoin is mined on a distributed computer network of users running specialized software; the network solves certain mathematical proofs, and searches for a particular data sequence ("block") that produces a particular pattern when the BTC algorithm is applied to it. A match produces a bitcoin. It's complex and time- and energy-consuming.
According to David Zimbeck only 21 million bitcoins are ever to be mined (about 11 million are currently in circulation). The math problems the network computers solve get progressively more difficult to keep the mining operations and supply in check.
This network also validates all the transactions through cryptography.
How does Bitcoin work?
Internet users transfer digital assets (bits) to each other on a network. There is no online bank; rather, Bitcoin has been described as an Internet-wide distributed ledger. Users buy Bitcoin with cash or by selling a product or service for Bitcoin. Bitcoin wallets store and use this digital currency. Users may sell out of this virtual ledger by trading their Bitcoin to someone else who wants in. Anyone can do this, anywhere in the world.
There are smartphone apps for conducting mobile Bitcoin transactions and Bitcoin exchanges are populating the Internet.
David Zimbeck explaining how Bitcoin is valued...
Bitcoin is not held or controlled by a financial institution; it is completely decentralized. Unlike real-world money it cannot be devalued by governments or banks.
What are its benefits?
There are benefits to consumers and merchants that want to use this payment option.
1. Fast transactions - Bitcoin is transferred instantly over the Internet.
2. No fees/low fees -- Unlike credit cards, Bitcoin can be used for free or very low fees. Without the centralized institution as middle man, there are no authorizations (and fees) required. This improves profit margins sales.
3. Eliminates fraud risk -Only the Bitcoin owner can send payment to the intended recipient, who is the only one who can receive it. The network knows the transfer has occurred and transactions are validated; they cannot be challenged or taken back. This is big for online merchants who are often subject to credit card processors' assessments of whether or not a transaction is fraudulent, or businesses that pay the high price of credit card chargebacks.
4. Data is secure -- As we have seen with recent hacks on national retailers' payment processing systems, the Internet is not always a secure place for private data.With Bitcoin, users do not give up private information
5. Convenient payment system -- Merchants can use Bitcoin entirely as a payment system; they do not have to hold any Bitcoin currency since Bitcoin can be converted to dollars. Consumers or merchants can trade in and out of Bitcoin and other currencies at any time.
6. International payments - Bitcoin is used around the world; e-commerce merchants and service providers can easily accept international payments, which open up new potential marketplaces for them.
7. Easy to track -- The network tracks and permanently logs every transaction in the Bitcoin block chain (the database). In the case of possible wrongdoing, it is easier for law enforcement officials to trace these transactions.
8. Micropayments are possible - Bitcoins can be divided down to one one-hundred-millionth, so running small payments of a dollar or less becomes a free or near-free transaction. This could be a real boon for convenience stores, coffee shops, and subscription-based websites (videos, publications).
David Zimbeck explains that it's not an actual coin, it's "cryptocurrency," a digital form of payment that is produced ("mined") by lots of people worldwide. It allows peer-to-peer transactions instantly, worldwide, for free or at very low cost.
This currency is not backed by a tangible commodity (such as gold or silver); bitcoins are traded online which makes them a commodity in themselves.
Bitcoin is an open-source product, accessible by anyone who is a user. All you need is an email address, Internet access, and money to get started.
Where does it come from?
Bitcoin is mined on a distributed computer network of users running specialized software; the network solves certain mathematical proofs, and searches for a particular data sequence ("block") that produces a particular pattern when the BTC algorithm is applied to it. A match produces a bitcoin. It's complex and time- and energy-consuming.
According to David Zimbeck only 21 million bitcoins are ever to be mined (about 11 million are currently in circulation). The math problems the network computers solve get progressively more difficult to keep the mining operations and supply in check.
This network also validates all the transactions through cryptography.
How does Bitcoin work?
Internet users transfer digital assets (bits) to each other on a network. There is no online bank; rather, Bitcoin has been described as an Internet-wide distributed ledger. Users buy Bitcoin with cash or by selling a product or service for Bitcoin. Bitcoin wallets store and use this digital currency. Users may sell out of this virtual ledger by trading their Bitcoin to someone else who wants in. Anyone can do this, anywhere in the world.
There are smartphone apps for conducting mobile Bitcoin transactions and Bitcoin exchanges are populating the Internet.
David Zimbeck explaining how Bitcoin is valued...
Bitcoin is not held or controlled by a financial institution; it is completely decentralized. Unlike real-world money it cannot be devalued by governments or banks.
What are its benefits?
There are benefits to consumers and merchants that want to use this payment option.
1. Fast transactions - Bitcoin is transferred instantly over the Internet.
2. No fees/low fees -- Unlike credit cards, Bitcoin can be used for free or very low fees. Without the centralized institution as middle man, there are no authorizations (and fees) required. This improves profit margins sales.
3. Eliminates fraud risk -Only the Bitcoin owner can send payment to the intended recipient, who is the only one who can receive it. The network knows the transfer has occurred and transactions are validated; they cannot be challenged or taken back. This is big for online merchants who are often subject to credit card processors' assessments of whether or not a transaction is fraudulent, or businesses that pay the high price of credit card chargebacks.
4. Data is secure -- As we have seen with recent hacks on national retailers' payment processing systems, the Internet is not always a secure place for private data.With Bitcoin, users do not give up private information
5. Convenient payment system -- Merchants can use Bitcoin entirely as a payment system; they do not have to hold any Bitcoin currency since Bitcoin can be converted to dollars. Consumers or merchants can trade in and out of Bitcoin and other currencies at any time.
6. International payments - Bitcoin is used around the world; e-commerce merchants and service providers can easily accept international payments, which open up new potential marketplaces for them.
7. Easy to track -- The network tracks and permanently logs every transaction in the Bitcoin block chain (the database). In the case of possible wrongdoing, it is easier for law enforcement officials to trace these transactions.
8. Micropayments are possible - Bitcoins can be divided down to one one-hundred-millionth, so running small payments of a dollar or less becomes a free or near-free transaction. This could be a real boon for convenience stores, coffee shops, and subscription-based websites (videos, publications).