Bitcoin, the basics

You may have heard of Bitcoin over the years – it’s a virtual currency that was created in 2009 by a computer wiz with the screen name Satoshi Nakamoto. It is a completely digital type of cash, and plans to revolutionise the way we see and use money. To start with, here are a few things you need to know about Bitcoin…

  • All users are anonymous, and transactions are private. There are no banks involved
  • Similar to the currencies we use, the value of Bitcoin is determined by how much people are willing to exchange it for
  • It’s near-possible to tie a bitcoin wallet to any individual
  • In December 2017, one Bitcoin was worth around $16,000
  • It runs on the blockchain, a decentralised public ledger run by ‘miners’
  • To date, there are around ten million Bitcoin transactions a month
  • The government has no control over Bitcoin or any of its transactions
  • There are no transaction feeds
  • No one knows whether founder Satoshi Nakamoto is one person or a group!
  • Bitcoin is used to fund companies, invest cash or transfer money without fees, it’s also widely known to be associated with criminal activity such as drug dealing and money laundering
  • There are a selection of Bitcoin ATMs that you can withdraw cash from in a number of countries such as London, Canada, and the US
  • Bitcoin is accepted by a number of companies now, including PayPal and Microsoft
  • Each set of transactions processed is called a block. The block is then secured by the ‘miners’
  • The blockchain is like a checkbook register or a general ledger of transactions
  • Most payments are settled within 10 minutes
  • The blockchain ledger with all transaction records is available to view publically

For further information head to the Bitcoin website, or if you’d like to understand more about investing elsewhere, take a look at our investment page.

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