What is Bitcoin?

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world (Bitcoin Mining), using software that solves mathematical problems.

What is Bitcoin?

It’s the first example of a growing category of money known as a cryptocurrency. Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.

However, bitcoin’s most important characteristic and the thing that makes it different from conventional money is that it is decentralized. No single institution controls the bitcoin network.

This puts some people at ease because it means that a large bank can’t control their money. This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules.

Those banks can simply produce more money to cover the national debt, thus devaluing their currency. Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are ‘mined’, using computing power in a distributed network.

This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network.