Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
Bitcoin is divorced from the traditional banking system and is exchanged over the internet. This means that it is possible to buy goods and services with bitcoins, without having to link your bank account or other payment processor.
The value of a bitcoin fluctuates according to supply and demand. Like gold, bitcoins are not subject to inflation.
What is Ethereum?
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference.
Ether is a cryptocurrency whose blockchain is generated by the Ethereum platform. Ether can be transferred between accounts and used to compensate participant mining nodes for computations performed. Ethereum provides a decentralized virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes.
What is a Cryptocurrency?
A cryptocurrency is a digital or virtual currency that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control.
Bitcoin, Ethereum, and Litecoin are all examples of cryptocurrencies.
What is Bitcoin Mining?
Bitcoin mining is the process of verifying and adding transaction records to the blockchain. Miners are rewarded with bitcoins for their efforts.
Bitcoin miners use special software to solve mathematical problems and are issued a certain number of bitcoins in exchange. This provides a constant flow of new bitcoins into the system.
What is a Bitcoin Wallet?
A bitcoin wallet is a digital Wallet that stores the user's public and private keys and allows the user to send and receive bitcoins.
Wallets can be stored on a computer or mobile device. Bitcoin wallets make it possible to transact with the cryptocurrency and provide a secure way to store bitcoins.
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