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Bitcoin Basics

WHAT IS BITCOIN?

Bitcoin is a digital currency, which allows transactions to be made without the interference of a central authority. The cryptocurrency system is a peer-to-peer open-source software, meaning computers are part of a mining process for coins.

WHO CREATED BITCOIN?

Bitcoin was designed and created by an anonymous programmer, or possibly group of programmers, by the name of Satoshi Nakamoto.

HOW CAN I BUY BITCOINS?

There are various places to buy bitcoin in exchanges for another currency, with international exchangess available as well as local. Popular international Bitcoin exchangess include:

• Bitsquare

• Coinbase

• Kraken

HOW DO I STORE BITCOINS?

Bitcoins can be transferred from a bitcoin exchanges to one of many bitcoin wallets, ranging from online options to ‘cold storage’.

WHAT CAN YOU BUY BITCOIN WITH?

Bitcoin can be purchased through a digital marketplace, through which you can fund your account with your currency of choice, and place an order on the open market. Bank transfers are the most popular mode of payment.

IS BITCOIN LEGAL?

The use and trade of Bitcoin is legal in the majority of countries in the world, however, because it is a deregulated marketplace, governments are concerned about its potential threat as a tool for money laundering. Although mining and exchanging are questionable in terms of legality, it is known to be legal for users who exchanges bitcoins for goods and services.

WHAT IS BLOCKCHAIN?

A blockchain is a digital ledger recording cryptocurrency transactions, maintaining records referred to as ‘blocks’ in a linear, chronological order.

WHY USE A BLOCKCHAIN?

Using a blockchain ensures security and manages digital relationships as part of a system of record.

WHAT IS DISTRIBUTED LEDGER?

A distributed ledger is a database, digitally recording transaction information using cryptography, making it secure and unforgeable.

WHAT IS THE DIFFERENCE BETWEEN A BLOCKCHAIN AND A DATABASE?

There are several differences between a blockchain and a database, including the level of control. Blockchains are under a decentralized control, whereas a centralized database creates a dependent relationship between users and administrators. Users tend to prefer confidentiality, which is better achieved through a centralized database. Performance also differs, as a centralized database is able to compute information faster than blockchains.

WHAT ARE ALTCOINS?

The term ‘altcoins’ is short for alternative coins. Given that Bitcoin was the first cryptocurrency to surface in the market, the other digital currencies that emerged are referred to as altcoins.