This is a very common question. The constant mention of bitcoin on news recently has made a lot more people aware of Bitcoin. Now that they have heard that it is a way to earn lots of money they want to understand more about it. They look for answers and usually it is the person they’ve heard talking about bitcoin previously who ends up being the one who gets all of their questions.
If you have ever been in this position, where you have struggled to explain bitcoin to someone who doesn’t know much about technology, we feel your pain. Here’s how you can explain bitcoin in simple terms.
What is Bitcoin?
Bitcoin is a currency, just like the US dollar or any other country’s currency. The main difference is that it doesn’t belong to any country and it isn’t controlled by any company. It is instead automatically regulated by a secret code, which is why it is called a ‘cryptocurrency’, where crypto means code. It just means that there is a formula that allows more bitcoins to be made if it is solved.
Who owns Bitcoin
No one owns Bitcoin as a whole, that is what makes it so unique. The United States government owns US Dollars, and all other such national currencies are owned and run by respective governments. This isn’t how Bitcoin works. No one controls it. There is a system in place and you just have to use it according to the system in place. No one party can change the system in any way.
Where do Bitcoin come from?
Bitcoins are generated through a complicated arithmetic process. This is referred to as ‘mining’ but there is no actual mining involved. A calculation runs on a computer and at the end of the calculation a bitcoin is generated. However it must be noted that the calculation is not easy to solve and takes several days to solve, which is why you cannot just start making bitcoin and selling them.
Are Bitcoin illegal?
No, there is nothing illegal about bitcoin. You do not break any laws when you buy bitcoin or when you use bitcoin, unless you use it to buy something illegal. They aren’t used as legal tender in the country, meaning you cannot use them in place of the local currency, but they aren’t breaking any law either. You can however use them at many stores and the number of stores that accept bitcoin is steadily increasing.
How do I get bitcoins?
If you really want to get bitcoins the easiest way to do so is to buy them from one of the many bitcoin exchanges on the internet. However, bitcoins are experiencing a surge right now and prices are higher than they have ever been before, so be careful and don’t risk too much of your money into it.
Are there any other questions you would like us to explain in simple terms? If yes then make sure you send us the questions and we’ll do our best to answer them too!