Bitcoin is digital money used for secure and instant transfer of
value anywhere in the world. It is not controlled or issued by any bank
or government - instead it is an open network which is managed by its
users. Much in the way email improved communication by making it fast
and cheap, bitcoin is an improvement on existing payment methods which
were not designed for the internet era.
Is Bitcoin safe?
Bitcoin’s core protocol is viewable by anyone, has been vetted by
thousands of security researchers around the world, and has proven to be
robust and reliable after immense scrutiny. Using bitcoin is similar to
using other private applications on the internet, such as email or
online banking. Just like these other web services, you must access your
bitcoin with a password in order to ensure only you have access to your
money.
Is it tied to the value of the dollar?
The value of a bitcoin is not tied or pegged to the value of any
other currency. Similar to stocks or property, bitcoin’s value is
determined by buying and selling in the open market. A bitcoin’s price
changes in real time based on the number of people who want to buy or
sell it at a given moment.
Why does it change value?
Bitcoin is traded for dollars, euros, yen, and other currencies in
real time 24 hours a day. Depending on the demand for buying or selling
bitcoin, the price can fluctuate from day to day. This is similar to the
manner in which the value of a stock or property can go up or down
based on supply and demand. Bitcoin’s value can be volatile compared to
traditional currencies such as the US dollar because it is still an
emerging technology.
Is it similar to a credit card or paypal?
Unlike credit card networks like Visa and payment processors like
Paypal, bitcoin is not owned by an individual or company. Bitcoin is the
world’s first completely open payment network which anyone with an
internet connection can participate in. Bitcoin was designed to be used
on the internet, and doesn’t depend on banks or private companies to
process transactions.
Why would I use bitcoin?
Bitcoin allows you to instantly send any amount of money to anyone in
the world without needing a bank. It allows you to access your money
without needing an ATM or credit card - bitcoin gives you back control
over your money. Plus you can pay friends back for dinner, buy your next
computer, and donate to charity, all using bitcoin.
Where can I spend bitcoin?
Many large online businesses accept bitcoin, such as Overstock,
Expedia, and Dell. Non-profits such as Wikipedia and the United Way also
accept bitcoin donations. Look for a bitcoin payment option at many of
your favorite websites and you’ll be surprised how many accept bitcoin!
You can view a list of
merchants here.
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