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Bitcoin is a virtual currency online, which does not exist as physical notes and coins, but only in digital databases.

Unlike conventional currencies like Dollars or Pounds, so Bitcoins are completely decentralized and either issued or regulated by any central bank or regulatory authority.

idea is that tansaksjoner can be anonymous, and without the authorities can intervene.

All transactions are public and stored in a database all the network can check. Cryptography facilitates security, and an easily accessible due to history makes the money can only be used by the owner, and not several times.

A transaction is not valid until it is broadcast to others in the network, and recognized in a collective list of known transactions, called blokkjeden.

money “issued” by a computer program to create new Bitcoins. The program is open source anyone can check.

A new batch of Bitcoins generated about six times every hour. There is currently well 11 million Bitcoins, and the system has a built-in maximum limit of 21 million that is expected to reach about 127 years. The point of such limited growth to avoid inflation.

process of generating new Bitcoins is called “mining”, mine exploitation, and comparing the growth of gold mining, which also takes a long time and it prevents inflation.

To create new Bitcoins must use the computing power available to the network. By solving complex mathematical calculations (algorithms) that Bitcoins original program generates rewarded with newly issued money. The more computing power to provide the system, the better chance you have of finding gold in your “mining”. Can your computer to crack a code and start a new block, you get 25 new Bitcoins.

mathematical point of these challenges is to prevent inflation.

Most users, however, uses existing Bitcoins in circulation, rather than to “dig for gold” itself. It is also possible to exchange the usual money dollars and dollars in Bitcoins through money changers.

users store their Bitcoins on their PC through a wallet file (digital wallet), or with a third party wallet service (one Bitcoinbank, if you will). In both cases, Bitcoins sent over the Internet to anyone with a Bitcoin address.

There is a limit to how one can use Bitcoins. Broadly speaking, one can only spend the money peer-to-peer, ie transactions with others involved in the system. Some conventional stores and service providers, however, eventually joined the network, and now accepts payment in Bitcoins.