Bitcoin Frequently Asked Questions FAQS

Bitcoin is a virtual or digital currency. Think of it as an online version of cash if it's easier. While you can use it to buy some products and services, many shops are not yet accepting Bitcoin. But, the momentum to accept bitcoin is growing quite quickly. 

Not only did PayPal, the online payment service, announce that it would be allowing its customers to buy and sell Bitcoin, but several major institutions are already stating they will be also supporting it. In fact, Tesla themselves bought $1.5 billion in bitcoin and stated plans to accept it as payment.

How does Bitcoin work?

Each Bitcoin is basically a computer file which is stored in a 'digital wallet' app on a computer or smartphone. People can then send Bitcoins (or part of one) to their digital wallets or to other people. All transactions are recorded in a public list called the blockchain. In this way, it is possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies or undo-ing transactions.

How do people get/use Bitcoins?

There are three main ways people get or use Bitcoins. They can buy Bitcoins using 'real' money or sell things and let people pay them with Bitcoins, or they can even be created using a computer in a process called mining. But don’t be confused this is a very long and expensive process requiring  powerful computers and even if you started mining now it could be years before you got a single Bitcoin. The fact is you could easily end up spending more money on electricity for your computer than the Bitcoin would be worth.

Why are Bitcoins valuable?

Just like gold or diamonds, Bitcoins are valuable because people believe they are and are willing to exchange them for real goods and services, and even cash. Some like them simply because Bitcoins are not controlled by the government or banks and the enjoy tat they can be spent fairly anonymously.  True all transactions are recorded, but nobody would know which 'account number' was whose unless they were told.

Are Bitcoins secure?

Since every transaction is recorded publicly,  it's very difficult to copy Bitcoins, make fake ones or spend ones that people don't own. That being said, it is possible to lose a person's Bitcoin wallet or delete their Bitcoins and lose them forever.

Investment Risk - Buyers of Bitcoin should understand that any investment in Bitcoin or in any securities for that matter, constitutes a high degree of risk, including the risk of loss of the potential Buyer’s entire investment. Always seek competent financial advice.

SmartGuy News
Beverly Hills, CA, USA