Bitcoin Basics

The ABCs of Bitcoin Basics

Bitcoin is a new kind of money. My purpose here is to explain it in very simple terms. If you are already an experienced Bitcoin user, or if you know a great deal about business and finance, this essay may seem very facile, and you may prefer to read the more detailed “What is Bitcoin?“. The objective is not to bore you, but to address complex topics so that new users, including young children, can understand. You might think of this article as a variation on the theme of “Bitcoin for dummies,” or “Cliff Notes for new Bitcoin users.” This article is only the first in a series, which will be linked together once all have been published.

Find the rest at Coinbrief.net

E is for Everything

Bitcoin can be used at a vast array of retailers worldwide. Anywhere that you can connect to the Internet, you can make purchases with Bitcoin. Even if your plans extend above Earth’s atmosphere, you can pay with Bitcoin, according to Virgin Galactic.

Sites like all4btc.com allow you to make purchases on sites like eBay and Amazon with Bitcoin by simply copying the product web address. WordPress accepts Bitcoins for upgrades, and was one of the earliest large organizations to do so.

The EFGs of Bitcoin Basics at Coinbrief.net

I is for Individual to Individual, or Peer-to-Peer

One of the key advantages of Bitcoin is the method of operation for transaction processing. If two people wish to engage in trade and commerce, using Bitcoin, they do so. They don’t need a licence, they don’t need permission. They simply need to agree on a price. Once a buyer has agreed to buy and pay with Bitcoin and a seller has agreed to sell and accept Bitcoin, the transaction can proceed.

That same situation is not necessarily true in the case of mainstream commerce. In the case of a brick-and-mortar store, the seller may be required to have a business licence, agree to collect sales taxes, agree to be inspected by the fire marshall, meet building codes and occupancy standards, comply with hiring guidelines, withhold taxes from income, and do any number of other things that are required by various federal, state, and local laws, regulations, and ordinances. Simply getting into business may be very costly and time consuming.

The IJKs of Bitcoin Basics at Coinbrief.net

M is for Multisig, Mixing, and Mining

One of the important discoveries in the years since David Chaum first pioneered digital cash is the need for the capability to have multiple signatures to confirm that a certain event has taken place. In developing the Bitcoin protocol, Satoshi Nakamoto was very aware of this need. Bitcoin provides for multiple signatures.

Multisig Wallets

Using the multisignature feature, you can have a Bitcoin address with several associated private keys, such that you need any more than one of them to spend the funds. You can specify how many keys have to sign, and have as many keys involved as you wish. Multisig escrow features are found in services provided by companies like Bitrated as well as somewhat more mainstream Bitcoin sites like Coinbase. Very detailed information about multisig and other features is found in the Bitcoin Developers Guide.

The MNOs of Bitcoin Basics at Coinbrief.net