FREQUENTLY ASKED QUESTIONS
What is Bitcoin?
Bitcoin is a popular digital currency, created and stored electronically. It’s not centrally controlled, nor are bitcoins printed; instead, bitcoins are made by people and businesses through software that solves mathematical problems.
Bitcoins belong to a growing category of digital money called cryptocurrency.
One of Bitcoin’s most distinguishing characteristics is that it’s completely decentralized. This means that its network is not controlled by any one institution. This makes a lot of people feel secure because it means that a large bank or institution won’t be able to control their money.
Why use Bitcoin?
There’s many advantages to using Bitcoin, many of which include:
Quick, Easy and Convenient - You can send and receive bitcoins anywhere in the world at any time in a matter of a few minutes.
Low Fees – Normally, the fees for Bitcoin transactions are very small. Bitcoin fees can fluctuate due to the dynamic fee market. In addition, some wallets will also allow you to pay a fee you’re willing to spend. With higher fees, you’ll get faster confirmation of your transactions.
Secure – When using Bitcoin, users remain in control of their transactions. You’re also protected from identity theft since Bitcoin payments can be made without personal information associated with the transaction.
Transparent - All Bitcoin transactions are fully available on the blockchain for anybody to verify and use in real-time.
How can I get Bitcoin?
Use the following options to get Bitcoins:
As for paying for your bitcoins, you can use anything from hard cash, credit and debit cards to wire transfers, or even other cryptocurrencies.
Online Exchanges and Wallets – New to Bitcoin? There’s a variety of exchanges and wallets that you can find, depending on your needs. Many exchanges and wallets will store amounts of digital and/or fiat currency for you – a lot like a regular bank account.
LocalBitcoins.com – You can search for individuals selling Bitcoin in your area. It’s easy. Simply enter the amount you wish to acquire, send the trade request and send your payment to the seller.
Face to Face – You also have the option of getting bitcoins in person. If you want anonymity or don’t want to deal with banks, simply acquire Bitcoin via a face-to-face transaction with a local seller.
Selling Goods in Exchange for Bitcoin-Similar to barter trade, you can actually exchange goods that you own for Bitcoin. It’s another quick and convenient way of getting more of the digital currency.
Bitcoin ATM - you can withdraw or deposit bitcoins using Bitcoin ATM machines near you.
Mining - You can also be awarded bitcoins as a miner—once you’ve verified transactions and they’ve been added to the public ledger, also known as the blockchain, you’ll be given bitcoins for your service.
How can I sell Bitcoin?
There are three main ways to sell Bitcoin:
Direct Trade — The first method involves a direct trade with another person, or using an intermediary to enable the transaction, such as LocalBitcoins.com.
Exchanges — Use an online exchange to trade into their preferred currency, instead of another individual, to sell bitcoins.
Peer-to-Peer Trading— This method allows Bitcoin owners to sell their bitcoins for goods by selling them to individuals who wish to acquire cryptocurrency.
How does Bitcoin work?
Bitcoin transactions occur between electronic Bitcoin wallets, and are digitally verified and signed for security. Thanks to the massive public ledger called the blockchain, users are aware of all transactions, and its history and when bitcoins were generated can be tracked.
If you send some bitcoins to, say, a friend, that transaction will have three pieces of information:
Once a transaction is set up, it makes its way into the Bitcoin network where it awaits verification. Through the process of mining, miners use software to solve mathematical problems. Once completed, the transaction successfully moves into the blockchain.
The amount of Bitcoin you wish to send.
The recipient’s wallet address, generated randomly and consisting of a sequence of letters and numbers – this is where you’ll be sending your funds.
A private key, which is also a unique sequence of numbers and letters exclusively available to you. This key will allow you to access your wallet.
Is Bitcoin secure?
Bitcoin has a strong track record for security and privacy, thanks to its protocol and cryptography. With private keys, individuals’ wallets are kept secure. The only way this would not be true is if users lose this information.
This is why, you should always take care with securing your funds, and we’ve assembled some tips and tricks to help you along the way.
What is the Blockchain?
The blockchain, is a huge, shared public ledger where the entire Bitcoin network is situated. All verified transactions are added to the Blockchain, where everyone can see information pertaining to Bitcoin wallets and verify their balances.
What is mining?
Bitcoin mining primarily involves adding previous Bitcoin transaction records to the blockchain. The people involved are called miners; their job is to confirm the transactions to the network by solving mathematical problems using a software, as well as work towards using the blockchain to distinguish legitimate transactions and ensure that double spending does not occur. Double spending is when the same Bitcoins have been used twice.
The main goal of mining is to ensure security within the Bitcoin network. As a secondary goal, mining is also used to introduce Bitcoins into the system. As an incentive, miners get paid in Bitcoin for their services.
Where can I spend Bitcoin?
There’s plenty you can do with your bitcoins. Spend them online or in actual stores across a variety of industries – including travel, hospitality/hotels, etc.
Check out some of the companies that accept Bitcoin here.
Is Bitcoin anonymous?
Bitcoin transactions are not tied to any personal information which allows users to protect their privacy. However, since all Bitcoin transactions are public knowledge and permanently on the blockchain, other users can see the activity associated to a particular wallet address—hence not being 100% anonymous. It is highly recommended to only use Bitcoin addresses once to avoid your identity being revealed either through a specific purchase or other means.
Are there any transaction fees?
Normally, Bitcoin transactions have low fees. These fees fluctuate and depend on the dynamic fee market. To speed up your transactions, you can pay a certain Bitcoin fee.