What Are Bitcoins?

What are bitcoins? The world’s first decentralized digital currency!

Whether you want to buy a chai latte or support family overseas, only bitcoin gives you the freedom to do so instantly at the touch of a button. No more waiting in line at the branch and no more hefty bank fees. This is the 21st century. This is bitcoin.

Below is Bitcoin 101, Bitcoin 201, Bitcoin 301, and “How do you start using bitcoin?”

Bitcoin 101:

Unlike other digital currencies, such as Air Miles, no one “owns” bitcoin. There is no central bank and no central regulating authority. bitcoin is completely decentralized. The benefit of this is that no one can make (or “mine”) extra bitcoins at will. Currently, only 25 bitcoins are created every 10 minutes, regardless of demand. The math in the code ensures this.

The math also ensures that there will only ever be 21 million bitcoins mined. The number of bitcoins mined every 10 minutes also halves every 4 years until the last coin is generated about 100 years from now. So whereas 50 bitcoins were mined in 2009, now it’s only 25, and in 2016 there’ll only be 12.5.  This might not sound like much, but each bitcoin can easily be broken down into very small pieces, each of which is called a “Satoshi” and acts like a bitcoin penny. But whereas there are only 100 pennies in a dollar, there are 100,000,000 Satoshis in every bitcoin, so there’s always a useful number of Satoshis for day-to-day trade no matter what the price of 1 bitcoin is.

Bitcoin is here, and Bitconomy is here to get you ready.

Bitcoin transactions occur on the world’s largest peer-to-peer network to give people complete control over their money. The software is also open-source, making it transparent and accountable. The idea for Bitcoin was propsed in late 2008 by an anonymous group of programmers who went by the pseudonym “Satoshi Nakamoto” and the idea was implemented on Jan. 3, 2009.

New bitcoins are generated by specialized computers called “miners”. Miners contribute their computing power to the network to facilitate transactions. To reward miners for their work, each of them gets a lottery ticket. More lottery tickets are earned by having more computing power relative to the rest of the network, so if you have 10% of the computing power, you’ll win 1 in 10 lotteries, or 1 every 1 hour, 40 minutes. The lottery reward is currently 25 bitcoins, plus a small amount transaction fees, also called “miners fees”.

bitcoin’s scarcity is mathematically ensured – unlike other currencies that are subject to  unpredictable inflation. bitcoin can also be purchased and sent to anyone in the world with an internet connection, uniting 2 billion people in one marketplace.

bitcoin is part currency, part commodity, and part digital asset class. It’s a pandora’s box of global exchange and there are already 2,000 brick-and-mortar retailers accepting it worldwide, in addition to thousands more online retailers.

Bitcoin (capital “B”) is a global payment system that instantly and securely transfers value in the form of bitcoin (lowercase “b”).

Bitcoin 201:

Bitcoin 301:

For more on the history and technical features of Bitcoin, check out Bitcoin.org.

How do you start using bitcoin?

Download a “Bitcoin Wallet” app on your iPhone, Android, home computer or make one online. Then either:

1. Buy Bitcoins!

2. Accept Bitcoin as a payment option at your business. Ask us how!

3. Pick up the tab at the restaurant and have your friends pay you back in bitcoin

4. Mine bitcoins (for advanced users only)

For more, reach out to us by e-mail, on Twitter, or Facebook. Or all three.
Located in Edmonton? Drop by our next bitcoin meet-up for a beer!