Bitcoin Basics

What are bitcoins?

Bitcoins are the first peer-to-peer currency; money created by people, instead of governments and banks. Bitcoins are rare, and it is easy (and free) to send and receive bitcoins.

Bitcoins are an online-only digital currency, and have existed since January 3, 2009, when the first bitcoin was generated. In the year 2140, the final bitcoin will be generated. Once the final Bitcoin is generated, there will be a total of 21 million Bitcoins.

Bitcoin is exciting and unique because it is decentralized; there is no central administrator or issuer. This makes the Bitcoin currency impossible for governments or powerful entities to control or manipulate the supply, and there is no single point of failure.

Bitcoins are the esperanto of currency. Learn more about bitcoins at our links page.

How do I get started with bitcoin?

There are a few services that make it easy to get started with bitcoin.

You will need a bitcoin wallet.

  • If you are computer savvy, you can download the Bitcoin software and manage your own wallet.
  • Otherwise, you can use an account at an exchange such as Mt. Gox or BitFloor as your bitcoin wallet.

Once you have a wallet, you have a public address that people can use to send you bitcoins.

You will need some bitcoins

The easiest way to get Bitcoins is to find a Bitcoin owner and trade her something for the Bitcoins. If you don't know anyone with Bitcoins, you still have some options:

  • The bitcoin faucet provides free bitcoins to help you get started.
  • There are a number of bitcoin exchanges, where you can buy and sell bitcoins in various currencies. Mt. Gox is the primary exchange for US dollars and other exchanges can be found in our links.  The best way to get cash to Mt. Gox is via Dwolla, which works in a similar way to PayPal, but only charges $0.25 per transaction.
  • You can buy bitcoins directly at BuyBitcoin.com.
  • You can become a bitcoin merchant and accept bitcoins for goods or services. The bitcoin network will certainly help promote you as a bitcoin merchant.

Learn more about bitcoins

Bitcoins are a new form of digital currency that allows for the exchange of value and creation of trust through a peer to peer network of servers and strong cryptography.  Networking technologies have allowed for a lot of new ways of interacting--from the rise of e-mail and instant messages to social networking sites, and development of freely available open source software operating systems and applications, we're now at a point where we can build a currency based on distributed servers vouching for each transaction that is placed.

We Use Coins is a great video about how bitcions work.