To better help you solve any queries about BitCoins we have compiled a list of Frequently Asked Questions. Please take the time to read below and if you still have any questions feel free to contact us
Bitcoin is a new technology, an international peer-to-peer network of payment and exchange, that is completely decentralized. Bitcoin is considered a digital asset, secured with powerful cryptography.
A software developer named Satoshi Nakamoto proposed Bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees.
Bitcoins are created digitally by the open source network, through a process called 'mining'. The so called 'miners' are a community of users that anyone could join. These users compete with each other on a complex computational problem to find a solution that creates the next transaction block. This method also protects the permanency of each transaction in the blockchain. The network also processes bitcoin transactions. Bitcoin protocol defines that only 21 million bitcoins can ever be created. However, these coins can be divided into smaller parts (the smallest divisible amount is one hundred millionth - 0.00000001 BTC - and is called 'Satoshi', after the founder of Bitcoin).
One of the major risks is losing your private keys, the access to your bitcoins, when they are stored in a compromised computer or beyond your control.
Malicious software can result in a third party's access and manipulation of your Bitcoin wallet through your personal computer. Since the Bitcoin price is volatile, there is an accompanying currency risk, since the exchange rate can rise or fall significantly.
Bitcoins are transferred between digital wallets through a global open source system.
We can use bitcoins to purchase products online, through sites that accept Bitcoin payments.
TheBITco as well as various sites can exchange/trade bitcoins, or exchange can be done individually between bitcoin owners.
A fast rise in price does not constitute a bubble. An artificial over-valuation that will lead to a sudden downward correction constitutes a bubble. Bitcoin's value is raised exponentially by increases in adoption, more people can communicate financially with more people. If people continue employing it for its advantages it will maintain a certain threshold value, regardless of exchange rate, unlike a stock.
A Ponzi scheme is a fraudulent investment operation that returns pays to its investors from their own money. Bitcoin is a free software project with no central authority, with no entry fees and no gain from anyone. Its operation is transparent and it has been reviewed by experts at Microsoft, Google, IBM, Oracle and several other industry leaders, including several governmental authorities in many countries.
The exchange rate of Bitcoin is determined based on Supply and Demand.
Bitcoin offers you a certain degree of privacy protection, but in cases of fraud or any other illegal activities, the wallet owner can be traced (through the transaction history) and legally prosecuted. Moreover, the trail of the transactions remains forever in the Blockchain, so it is unlikely criminals would choose to expose themselves while simpler, more anonymous means are available, including cash.
It is within the owner's obligations to report any profit to the taxation authorities.