Bitcoin is the most famous cryptocurrency. Cryptocurrencies are virtual currencies that are based on peer to peer verification and computer encryption. This kind of currency has many advantages over regular government based currencies. It is technically impossible to fraud the currency itself, there is no central entity to overlook or base transactions, it is completely electronic so it's perfect for online purchases and also completely usable for going in a store and purchasing groceries for example.
How it Works.
To start using Bitcoins, the user first needs to download a wallet software. There are many Bitcoin wallets available for the user to choose. They are available for many devices like computers, tablets, cellphones and the cloud. It is called a wallet because the way it works is just like a regular wallet, that's where the Bitcoins are stored, someone wants to buy a product they can just transfer the money from your wallet to the seller's wallet. When a Bitcoin transaction is made, that transaction is checked by the other wallets in the network to prevent the double spending of a Bitcoin or a fraction of it. This network to check the transactions make sure that no Bitcoin is ever spent twice or no one uses someone else's Bitcoin.
Since the transaction is made from a person to another directly without any institution in the middle, the transaction is completely free.
Where do Bitcoins come from?.
Bitcoins are mined by super computers. A Bitcoin consists of a hash of numbers and letters that meet determined criteria. There are only 22 million of this kind of numbers to be found. The more Bitcoins are mined the ore difficult it is to mine new Bitcoins. This mining process is also a safety measure since this computers are also working to make sure that the transactions are valid. As long as the computational power of the whole honest Bitcoin network is bigger than the possible attacker, the system is impossible to be tampered with.
