What is bitcoin?

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Bitcoin refers to a digital or electronic form of payment or currency system.  It works through a specific application on a person’s computer or mobile phone.  The value of bitcoins that a person has can be used for online payments for goods and services.  Bitcoins are likened to some kind of virtual money or wallet that people can use for their purchases online and even on actual stores.  Being a digital currency, the software that works in the background is not controlled by a single person or organization.  Instead, the users of this online payment and currency system are the ones that control the transfer of money from one person’s account to another.

People may earn bitcoins through different means and one is through the process called mining.  In mining, people earn bitcoins from doing different tasks and solving mathematical problems.  Through these competitive activities, users of the Bitcoin software will earn corresponding bitcoin values.  Once they have bitcoins in their own virtual wallets, they can now pay for various goods and services.  For those who do not want to work so hard on mathematical tasks, they may also purchase bitcoins in exchange for their actual money through an exchange system.  For retailers and those that offer services, they may also charge their customers and get bitcoins instead of traditional money.

Bitcoins may be used to pay for various goods including those that are offered in online stores.  Some actual stores are also joining the Bitcoin virtual payment system making the users of the system grow exponentially over the years. There are still some skeptics though regarding this virtual money system because of many associated illicit activities by some groups of people and users.  Nevertheless, the use of bitcoins have increasingly become popular and accepted because of various advantages over standard payment systems.  Paying through bitcoins is considered to be less expensive in terms of processing fees and transactions may be made virtually anytime.  Some people also feel more secure paying and/or receiving bitcoins because of transparency in the system.

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