Bitcoin (BTC) is a digital currency, which gets electronically provided and saved. Bitcoin is a decentralised currency and is not controlled by the goverment or any other 3rd Party. Low transaction fees, quick money transfer around the world and easy to handle.

Bitcoin is the first and most famous digital cryptocurrency out there. The upcoming tutorial will tell you the most important features of this digital currency in an easy way.

What is the difference between Bitcoin and convential money like $ or Euro?

You can use Bitcoin to buy goods and services and also participate in the financial market. It is providing the same financial features like conventional money has — US-Dollar, Euro or even gold and silver.

The most importent difference is that Bitcoin runs on a decentralized network called blockchain. That network can’t be controlled by goverment, central banks or any other 3rd party — the network controls itselfs.

Who founded Bitcoin?

A software engineer with the pseudonym Satoshi Nakamoto designed and created Bitcoin in October 2008. It is still unclear if it is only one person or a group of people. There are a lot of conspiracy theories and rumours out there.

How many Bitcoins are available?

The Bitcoin protocol, based on the blockchain, has a fixed amount of 21 million Bitcoins. A bitcoin can be divided down to 8 decimal places. Therefore, 0.00000001 BTC is the smallest amount that can be handled in a transaction.

What is the technology behind Bitcoin?

Bitcoin is completely based on mathematical calculation and comes as Open-Source Software, so everybody can see what the software is doing and what its purpose is.

The decentralized database, where all information is stored, is called blockchain and its trustless nature is revolutionary. This database network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded. The blockchain is the real innovation behind Bitcoin and many other cryptocurrencies like Ethereum and Litecoin.

To provide a stable and big Bitcoin blockchain network, there are millions of computers around the world, tirelessly competing to solve mathematical challenges. They get rewarded with Bitcoins for the computerpower and energy they provide (also called mining).

What are the most important characteristics of Bitcoin?

1. Bitcoin is decentralized

The network is not controlled by any central institution. Every computer that transfers Bitcoin is part of the network (if you run a so called „full node“ software). This means, there is little political hold to restrict the Bitcoin network or take Bitcoins from users. Even if the network would go offline worldwide, a copy of the blockchain can be saved on your harddrive.

2. Bitcoin is easy to handle

A Bitcoin-Account (Wallet) can be opened by anyone in a few minutes. If you are used to opening an account at a bank, you could easily fail at some bureaucratic hurdles which are not available with Bitcoin. Bitcoin also provides a new kind of connection to 3rd world countries, making it easier to transfer local currency out of e.g. a troubled economy with hyperinflation.

3. Bitcoin is semi-anonymous

Users can have unlimited Bitcoin-Accounts (Wallets). These wallets are not connected to names, addresses or any other personal information.

4. Bitcoin payments are 100% transparent

The network saves every transaction on the blockchain. The blockchain provides a kind of global register. If you have the public address of a Bitcoin account, you can see the amout of Bitcoin and all ever made transactions.

5. Low transaction fees

An international bank transfer can be very expensive and takes approximately up to 5 days. A Bitcoin transaction is very cheap, because there is no middleman you need to pay.

6. Bitcoin is very fast (Peer-to-Peer)

Bitcoins can be send worldwide and it only takes a few minutes until the network proofs the payment. A Bitcoin transfer goes Peer-to-Peer, meaning there is no middleman or intermediary within this transaction.

Where can I buy bitcoin?

There are many exchanges allowing you to buy bitcoin. The best way to buy Bitcoin is to visit www.hubx.io — This is like kayak.com for cryptocurrencies. You can compare all exchanges and always see the best price for bitcoin incl. all hidden fees.