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Bitcoin is the first decentralized digital currency. Bitcoins are digital coins you can send through the Internet. Compared to other alternatives, Bitcoins have a number of advantages. Bitcoins are transferred directly from person to person via the net without going through a bank or clearinghouse. This means that the fees are much lower, you can use them in every country, your account cannot be frozen and there are no prerequisites or arbitrary limits. Let's look at how it works! Bitcoins are generated all over the Internet by anybody running a free application called a Bitcoin miner. Mining requires a certain amount of work for each block of coins. This amount is automatically adjusted by the network such that Bitcoins are always created at a predictable and limited rate. Your Bitcoins are stored in your digital wallet which might look familiar if you use online banking. When you transfer Bitcoins, an electronic signature is added. After a few minutes the transaction is verified by a miner and permanently and anonymously stored in the network. The Bitcoin software is completely open source and anybody can review the code. Bitcoin is changing finance the same way the web changed publishing. When everyone has access to a global market, great ideas flourish. Let's look at some examples of how Bitcoins are already used today: You can purchase video games, gifts, books, servers and alpaca socks. Several currency exchanges exist where you can trade your Bitcoins for dollars, euros and more. Bitcoins are a great way for small businesses and freelancers to get noticed. It doesn't cost anything to start accepting them, there are no chargebacks or fees and you'll get additional business from the Bitcoin economy.
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