A few brief answers to some of the most frequently asked questions about Bitcoin. If you’re interested in Bitcoin don’t let these answers be the depth of your research, however.
If you want to learn about Bitcoin and are an absolute beginner, check our Bitcoin for Dummies section in the Bitcoin for Beginners‘ library. There are many articles in there explaining what Bitcoin is and how it works.
If you want to know how to buy Bitcoin, check out our Buy Bitcoin archive. It details all the best platforms, all the different ways to buy, sell and trade Bitcoin.
Or even if you just want to keep up to date with all the latest Bitcoin news, you will find everything you need on Bitcoin Maximalist.
Bitcoin is software protocol and network that runs on a decentralized network of hardware devices. The Bitcoin database is an open ledger, which houses the entire Bitcoin history of transactions. The hardware devices are either nodes or mining devices, and together they verify all transactions, and secure the network.
Bitcoin is a decentralized money. A money that nobody can control or manipulate, and a money that nobody can print and devalue. It’s also not necessary for any third party to verify transactions, so it makes it much faster and cheaper to send value. It’s also money built on the Internet: a society of almost 5 billion people.
As of today, Bitcoin is legal in most countries. The US, UK, Canada, Japan, the EU, and all other developed nations. It is legal in most other countries, but the legal status of Bitcoin varies in other developing nations.
People who understand Bitcoin buy Bitcoin because it is a peer-to-peer money that nobody can manipulate. It’s all set in the Bitcoin codebase which is secured by hundreds of thousands of computers all around the world. Bitcoins can be sent by anybody and no third party is need to verify the transactions, and nobody can stop Bitcoins being sent. There are many more reasons why people buy Bitcoin, and a deeper dive before doing so is recommended.
There are many great places to buy Bitcoin, and it all depends on your personal preference. You can buy Bitcoin on typical cryptocurrency exchanges, such as Binance and Kraken. Or you can buy it from peer-to-peer Bitcoin marketplaces, such as Paxful and LocalBitcoins. These types of platforms require you to verify yourself with government issued ID.
If you prefer to remain private and buy Bitcoin anonymously, you can buy it from one of thousands of Bitcoin ATMs around the world.
Nothing is really free, because even when you earn free Bitcoins you’re giving up your time, which is precious. But you can earn free Bitcoins. If you are a gamer, there are games that allow you to win satoshis. Or there’s freelance type platforms that pay out in BTC for doing tasks. Or you can save your Bitcoin in an interest bearing account and earn some BTC interest. Be careful with these, and only go with legitimate companies, though.
On average, the time it takes for miners to mine Bitcoin is 10 minutes. But they don’t just mine 1 BTC. Mined Bitcoins are created with every new block and these produce the Bitcoin block reward which at the moment is 6.25 BTC, so you could say it takes less than 2 minutes to mine each Bitcoin.
There is no exact science for the cost of mining a bitcoin, because the price will change every two weeks maximum. This is because there’s a Difficulty Adjustment that ensures it takes about 10 minutes to mine a block. And with other costs, such as your mining equipment, electricity, and other costs, it’s estimated that the average price to mine a bitcoin is around $12,500.
Both Bitcoin and the USD are backed by the faith people put in them. But the problem with the USD, and all other government issued fiat currencies, is that they can and do print them when they need them. They are inflationary and every time the government prints some it devalues the USD.
Bitcoin has a finite amount. There will only ever be 21 million bitcoins, and every coin is worked and paid for into existence. This hard money aspect of Bitcoin is what ensures it will always be superior to the USD and all other government printed currencies.
A Bitcoin Maximalist is somebody who believes in Bitcoin more than any other cryptocurrency. There are different levels to Bitcoin Maximalism, ranging from those who ‘know’ all other cryptos are useless shitcoins, to those Bitcoin Maximalists that believe other cryptos have their uses, and the best uses will be integrated into Bitcoin eventually.