Frequently Asked Questions
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Bitcoin is a global consensus network that creates a new payment system and fully digital money. This is the first decentralized p2p payment network, which is served by its own users, without central government or intermediaries. From a user perspective, Bitcoin is very similar to cash for the Internet. Bitcoin can also be seen as a leading triple entry accounting system.
Bitcoin is the first implementation of the concept of "cryptocurrency", which was first described in 1998 by Wei Dai. On a cyberpunk e-mail newsletter, he proposed the idea of a new form of money that uses cryptography instead of a central governing body to control emissions and transactions. The first Bitcoin specification and proof of this principle was published by Satoshi Nakamoto in 2009 via a cryptographic e-mail newsletter. Satoshi left the project at the end of 2010, without revealing details about his personality. The community has grown exponentially since then, and now many developers are working on Bitcoin.
Satoshi's anonymity often raises unreasonable doubts, most of which are related to a lack of understanding of the nature of Bitcoin's open source code. The Bitcoin protocol and software are publicly available, and any developer from anywhere in the world can familiarize themselves with the program text or make their own modified version of Bitcoin software. Like the current developers, Satoshi’s influence was limited only by those code changes that other users accept, and it’s therefore incorrect to say that he controls Bitcoin. Essentially, the identity of the inventor of Bitcoin is just as irrelevant today as the identity of the ancient inventor of paper.
No one owns the Bitcoin network, just like no one owns the technology behind email. Bitcoin is controlled by Bitcoin users themselves all over the world. Although developers are improving the software, they cannot force the protocol to change because users are free to choose which software and which version to use. In order to be compatible, all users must use software that obeys one rule. Bitcoin can only work correctly with full agreement between all users. Therefore, all users and developers, if there is an incentive to protect this consensus.
From the point of view of users, Bitcoin is just a mobile application or computer program that gives them access to a Bitcoin wallet and allows them to receive and spend bitcoins. This is how Bitcoin works for most users.
The Bitcoin network is based on a public register called a blockchain, or “block chain”. This register contains the history of all transactions ever made, allowing users' computers to verify the legitimacy of each transaction. The authenticity of each transaction is protected by electronic signatures corresponding to the addresses used in the transaction, which allows users to have full control over the forwarding of bitcoins from their bitcoin addresses. In addition, anyone can process transactions using the computer capabilities of specialized equipment and earn bitcoins for these services. This is commonly called mining. In order to learn more about Bitcoin, you can refer to this page or to the original document.
Receiving a bitcoin payment is almost instant. However, there is a slight delay before the network begins to confirm your transaction, including it in the block and before you can spend the bitcoins that you received. Confirmation means that there has been consensus on the network that the bitcoins that you received were not already sent to someone else and are henceforth considered your property. As soon as your transaction is included in one block, it will continue to receive confirmations from each subsequent block, which will indicate the strengthening of this consensus and will reduce the risk of canceling the transaction. Each transaction takes between a few seconds and 90 minutes, with an average duration of 10 minutes. Each user is free to choose at what stage to consider the transaction confirmed, but 6 confirmations are usually recognized as safe as 6 months for a credit card transaction.
Transactions can be made without commissions, but an attempt to make a free transaction can significantly slow down the transfer. And although the commission may increase over time, it usually amounts to a tiny amount.
Transaction commissions are used to protect against users who make transactions in order to overload the network and as a way to pay miners for their work in supporting network security. A more precise purpose of the work of the commissions is still being developed and will change over time. Since the commission is not tied to the number of bitcoins sent, it may seem incredibly small or unusually high. The commission is determined by parameters such as data sent with the transaction and the repeatability of the transaction. For example, if you receive a large number of small amounts, then the sending fee will be greater. If your business uses traditional-style transactions, you won’t have to pay an unusually high commission.
Bitcoin technology - protocol and cryptography - has a high level of time-tested security, and the Bitcoin network is probably the largest distributed computing project in the world. The biggest vulnerability in Bitcoin is the mistakes of the users themselves. Bitcoin wallet files that store the necessary private keys can be accidentally deleted, lost or stolen. This is very similar to physical cash stored in electronic form. Fortunately, users can use the best security practices to protect their money or use services that provide a good level of protection and insurance against theft and loss.
The protocol rules and cryptography used in Bitcoin still work perfectly, years after the creation of the network, which is a good indicator that the system is correctly designed. However, various security problems were found and fixed earlier, in various implementations of the software. Like any other software, Bitcoin software security depends on the speed with which these problems are found and resolved. The more such problems are identified, the more mature Bitcoin will become.
Often there is a misunderstanding about thefts and security problems that occur in various exchangers and bitcoin businesses. Although such problems arise, they are not related to the hacking of Bitcoin itself, and do not imply the inherent flaws of Bitcoin; just like a bank robbery does not mean that the dollar is compromised. However, it should be recognized that users need to provide a set of best practices and simple security solutions to better protect their money and to reduce the overall risk of theft and loss. Over the past few years, security features such as wallet encryption, offline wallets, bitcoin storage devices, and transactions requiring multiple signatures have been developed.