Bitcoin Basics
Why are bitcoin's valuable?
Because people think they are valuable
History of money
look at notes
Examples of wallets
Bitcoin core (fully load software-entire copy of block chain), Electrum (light weight), Bread (BRD) (lightweight for phone)
What is Bitcoin?
Bitcoin is a peer-to-peer payment network and a new kind of currency ("cryptocurrency")
Is it Bitcoin or bitcoin?
Bitcoin refers to the concept, network, or the software. bitcoin refers to the network's currency as a unit of account. e.g. "Alice sent 4.2 bitcoins to Bob"
How are bitcoin's created?
By means of mining, which is the process of adding transactions to the block chain. A miner who adds a block to the block chain gets a block reward of currently 6.25 BTC.
How many bitcoins are there?
Currently about 18 million. There will never be more than 21 million
Can bitcoins be money?
It is a unit of account, it can store value, but isn't a universal medium of exchange.
3 Functions money satisfies
Mediium of exchange, unit of account, store of value
Two theories of money
Metallism: the value of money is derived from the value of an underlying commodity (e.g. gold). This includes representative money (e.g. paper money that can be redeemed for gold). Chartalism: the value of money is derived from the power of the state that issue fiat currency. It has not intrinsic value (current US dollar). bitcoin kind of combines the advantages of both
How much does it cost to send/receive bitcoins?
Receiving is free. If you send BTC, you can leave a tip ("transaction fee") for the miner. Paying a higher fee means a faster processing time. Fees are unrelated to the transaction amount, but vary according to network activity.
Who created Bitcoin?
Satoshi Nakamoto (2008/2009)
Who is in charge of Bitcoin?
Satoshi used to make changes and posts until 2012. Nobody is in charge! It is open source.
How do you store bitcoins?
The ownership of bitcoins is recorded on Bitcoin's block chain, a public ledger of all transactions. The private keys that allow you to spend bitcoins can be stores using wallet software or on paper. 256 bit hexadecimal number
How do you send (spend) bitcoins?
Via wallet software that sends bitcoins to the recipients Bitcoin address. Each Bitcoin address is derived from a private key.
How do you acquire Bitcoins?
You can buy them on an exchange (e.g. Coinbase) or from a private party