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Our mission is to make crypto accessible to everyone in a simple, fast and safe way.

Bitcoin

What is Bitcoin?

Bitcoin, often described as a cryptocurrency, a virtual currency or a digital currency - is a type of money that is completely virtual.

It's like an online version of cash. You can use it to buy products and services, but not many shops accept Bitcoin yet and some countries have banned it altogether.

However, some companies are beginning to buy into its growing influence.

In October last year, for example, the online payment service, PayPal, announced that it would be allowing its customers to buy and sell Bitcoin.

The physical Bitcoins you see in photos are a novelty. They would be worthless without the private codes printed inside them.

 

How does Bitcoin work?

Each Bitcoin is basically a computer file which is stored in a 'digital wallet' app on a smartphone or computer.

People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people.

Every single transaction is recorded in a public list called the blockchain.

This makes it possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies or undo-ing transactions.

 

How are new Bitcoins created?

People build special computers to generate Bitcoins

In order for the Bitcoin system to work, people can make their computer process transactions for everybody.

The computers are made to work out incredibly difficult sums. Occasionally they are rewarded with a Bitcoin for the owner to keep.

People set up powerful computers just to try and get Bitcoins. This is called mining.

But the sums are becoming more and more difficult to stop too many Bitcoins being generated.

If you started mining now it could be years before you got a single Bitcoin.

You could end up spending more money on electricity for your computer than the Bitcoin would be worth.

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