What the f**k is Bitcoin anyway?

You've heard of Bitcoin right? You may not understand it but you've surely heard of it by now? I'm going to try and break the question of 'what exactly is Bitcoin' down into 10 simple steps (bear with me it's not an easy one to grasp)!

  1. Bitcoin is cryptocurrency - an alternative digital currency which is peer to peer and not centralised by any bank in the world
  2. Bitcoins are sent (or signed over) from one address to another. Each payment transaction is broadcast to the network so that the included bitcoins cannot be spent twice
  3. You can choose to accept Bitcoins for your product or service, buy bitcoins via a Bitcoin Exchange or find someone to trade cash for bitcoins in-person through a local directory
  4. There is a growing number of places (online and physical) that accept Bitcoins. Here's a huge list... 
  5. Transfers of Bitcoin are made via smartphone or computer without intermediate financial institution
  6. The processing of Bitcoin transactions is secured by servers called bitcoin miners
  7. Mining is also how new Bitcoins are generated
  8. Mining is like a continuous raffle draw, whereby mining nodes on the network are awarded bitcoins each time they find the solution to a certain mathematical problem (and thereby create a new block)
  9. Blocks are mined every 10 minutes, on average and for the first four years (or 210,000 blocks) each block included 50 new bitcoins 
  10. 10,500,000 bitcoins were created in the first 4 years from January 2009 to November 2012. Every four years thereafter this amount halves, so it will be 5,250,000 over years 4-8, 2,625,000 over years 8-12, and so on. Thus the total number of bitcoins in existence will never exceed 21,000,000

 

If you want to give Bitcoins a go there are a number of trial sites where you can recieve a small number of Bitcoins for free or in return for performing some small promotional activities. Take a look here... 

Also check out this great infographic from Second Market

sources: Bitcoin Wiki, Wikipedia

Paul Shepherd

I've worked in digital communications for around 15 years, and specialised in social media for the past three. Passionate about new technologies, media, and the impact it has on businesses bottom line, I try to bring that passion to every campaign for every brand we work with.