Bitcoin Mini Wiki Guide – Bitcoins FAQ

Bitcoin Mini Wiki Guide – Bitcoins FAQ

Here is a Bitcoin Mini Wiki FAQ to make you understand all about Bitcoin: What it is, what it does, how to acquire, and how to use to buy services online.

This Bitcoin FAQ guide is solely written in attempting to educate and create awareness about the Bitcoin technology.

What are Bitcoins?

bitcoin guide

Bitcoin is a form of digital currency that enables anyone to send instant payments with complete anonymity.  It uses a peer-to-peer technology to operate with no central authority required. The managing of transactions are carried out by the network.

Who developed Bitcoins?

The concept of the Bitcoin currency was developed by Satoshi Nakamoto. The original software made by him was released under MIT license. It is said that there are no records about Nakamoto’s identity or identities prior to the creating of Bitcoin.

Where to download Bitcoin?

Latest Bitcoin client software can be downloaded via Bitcoin.org, and is available for Windows, Linux, and Mac OS.

Why is Bitcoin System Special?

Bitcoins are easily sent through the Internet without needing to trust any third party. Its transactions are irreversible, fast, and cost very little. Its supply is regulated by software and the agreement of users of the system, and it cannot be manipulated by any government, organization, banks, or individual.

The Bitcoin lets you do anonymous currency transactions where no one will come to know about the payment or any info related to the payment, including who sent it or who received it.

Bitcoins system also prevents double spending, where people can make many copies of digital data like counterfeiting or pirating copies. The way it solves the problem of double spending is that whenever a new transaction was made, its validity is checked by confirming from a list that the digital currency was not used before. In this way, no one can copy the currency and use it again for more than once.

If there is a public listing, how is it anonymous?

The public listing on the Bitcoin system only shows the transaction ID and the amount of currency that ware transferred. Bitcoin system gives complete anonymity as you do not need to provide any of your personal details like name, address, email, etc.

How to use Bitcoins?

Bitcoins are kept in a digital wallet which you can store and keep in your computer or on a website online, which will manage and secure your digital wallet for you. You can have as many digital wallets and bitcoin address that you like.

For complete total anonymity, you can use Bitcoin software together with Tor to prevent anyone tracking your IP address.

How many people are using Bitcoins?

At this time, there are over 10.74 million Bitcoins in existence. Total number of Bitcoins in circulation is growing fast as seen in the graph below from Blockchain. It was also reported that Total Bitcoin Miners Revenue is over $80,000, and its Total Market Cap is about $248 million.

total bitcoins circulation

Total Bitcoins in Circulation as of February 2013

How to acquire Bitcoins?

Getting Bitcoins is really easy, as there are number of ways on how to acquire Bitcoins:

  • Mining
  • Currency exchange (bitcoin in exchange for Dollars or Euros) using bitcoin provider services like Mt. Gox
  • Providing services in exchange for Bitcoins

What is Bitcoin Mining?

Bitcoin mining is the process of extracting Bitcoins currency.  Most people actually mine Bitcoins to gain profit. Bitcoins are mined using a special software called Bitcoin Miner which tries to find a new block in the Bitcoin network.

If ever a new block is found, its owner will be gifted with 50 Bitcoins, although the process of mining Bitcoins may take too long as the computer has to perform long and tough hash calculation to find a new block. If you search YouTube for Bitcoin miner hardwares, you can see that some people actually setup a computer which only job is to mine bitcoins.

bitcoin miner

Sample computer that was set up for Bitcoin Mining purposes.

How to spend Bitcoins?

Spending Bitcoins is easier than you think. You can send Bitcoins to any person, or use it to buy goods, or donate to foundations that accept it like P2P Foundation, Operation Anonymous, Wikileaks, Archive.org, etc.

You can send some Bitcoins to any person once you know their bitcoin address.

For services and merchandise, you can buy products from vendors or service providers that accept Bitcoins.

Here is a listing with over hundreds of ogranizations and services that accepts Bitcoins.

How Bitcoin transaction works?

For a bird’s eye view of how the Bitcoin transaction works, below is a Bitcoin infographic from IEEE.org that shows how Bitcoins transactions are being processed.

how bitcoin transaction works

Bitcoin Infographic: How Bitcoins Transaction Works

Conclusion

The Bitcoins system itself is being quickly adopted, that many do invest on it. BTC1 was worth USD6$ a year ago and now worth USD23$+.

bitcoin value feb 2013

Bitcoin continuously increasing in value.

bitcoin market price

Bitcoin market price value keeps on increasing.

Bitcoin opens doors to a lot of possibilities, though because of its guaranteed anonymity and as no authority trace can be done on transactions, some to misuse the system for their illegal work.

That’s it! Hope you have learned a thing or two about Bitcoins from this article.

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Ameer

Ameer is your techie friend, the head admin, and editor-in-chief of this blog. In here we share the latest technology news and updates, computer tips and tricks, SEO, games and gaming news, and other tech articles that aims to help you with today's technology.

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