General

  1. What is Bitcoin?

Bitcoin is a distributed peer-to-peer digital currency that can be transferred instantly and securely between any two people in the world. It’s like electronic cash that you can use to pay friends or merchants.

  1. What are bitcoins?

Bitcoins are the unit of currency of the Bitcoin system. A commonly used shorthand for this is “BTC” to refer to a price or amount (e.g. “100 BTC”). There are such things as physical bitcoins, but ultimately, a bitcoin is just a number associated with a Bitcoin Address. A physical bitcoin is simply an object, such as a coin, with the number carefully embedded inside. See also an easy intro to Bitcoin.

  1. How can I get bitcoins?

There are a variety of ways to acquire bitcoins:

  • Accept bitcoins as payment for goods or services.
  • You can buy bitcoins from Bitit Coinbase, PayBis, Cubits, CoinCorner, BIPS Market, Circle, or Celery.
  • The most common way to buy bitcoins is the Bitcoin Exchanges
  • There are several services where you can trade them for traditional currency.
  • You can also buy bitcoins using Bitcoin ATMs that are locally in your area.
  • Find someone to trade cash for bitcoins in-person through a local directory.
  • Participate in a mining pool.
  • If you have a lot of mining hardware, you can solo mine and attempt to create a new block (currently yields 12.5 bitcoins plus transaction fees).
  • Visit sites that provide free samples and offers.
  1. Does Bitcoin guarantee an influx of free money?

Since Bitcoin is a new technology, what it is and how it works may be initially unclear. Bitcoin is sometimes presented as being one of three things:

  1. Some sort of online ‘get-rich-quick’ scam.
  2. A loophole in the market economy, the installation of which guarantees a steady influx of cash.
  3. A sure investment that will almost certainly yield a profit.

In fact, none of the above are true. Let’s look at them independently.

  1. What’s the current total number of bitcoins in existence?

Current count. Also, see Total bitcoins in circulation chart

The number of blocks times the coin value of a block is the number of coins in existence. The coin value of a block is 50 BTC for each of the first 210,000 blocks, 25 BTC for the next 210,000 blocks, then 12.5 BTC, 6.25 BTC and so on.

  1. How divisible are bitcoins?

A bitcoin can be divided down to 8 decimal places. Therefore, 0.00000001 BTC is the smallest amount that can be handled in a transaction. If necessary, the protocol and related software can be modified to handle even smaller amounts.

  1. What do I call the various denominations of bitcoin?

Unlike most currencies, Bitcoin amounts are highly divisible. This has led to a desire to create names for smaller denominations of bitcoin amounts, especially since transactions involving whole bitcoins are no longer quite so common. Bitcoin is decentralized, so there is no organization that can set official names for units. Therefore, there are many different units with varying degrees of popularity. As of 2014, the most common units are bitcoins, bits, and Satoshi: 1 bitcoin = 1 000 000.00 bits = 100 000 000 Satoshi.

The Bitcoin (abbreviated BTC or XBT) is the unit that was used in the original Bitcoin wallet software created by Satoshi Nakamoto. There is nothing particularly special about this unit, but it is by far the most common unit due to tradition.

The smallest value that the Bitcoin network supports sending is the Satoshi (sometimes abbreviated sat), one hundred-millionth (0.000 000 01) of a bitcoin. In other words, the network does not support sending fractions of a Satoshi. Since it is a hard limit, it seems natural to use it as a unit, though it currently has very little value. The unit was named in honor of Bitcoin’s creator after he left — he was not so vain as to name a unit after himself. The plural of Satoshi is Satoshi: “Send me 100 Satoshi”.

Another common unit is the bit, one millionth (0.000 001) of a bitcoin. This unit is the same as a microbitcoin (μBTC). Bits are seen by some as especially logical because they have two-decimal precision like most fiat currencies. You can send 1.23 bits, but not 1.234 bits due to the network’s limited precision.

It is also fairly common to use SI prefixes:

  • 0.01 BTC = 1 cBTC = 1 centibitcoin (also referred to as bitcent)
  • 0.001 BTC = 1 mBTC = 1 millibitcoin (also referred to as mbit (pronounced em-bit) or millibit or even bitmill)
  • 0.000 001 BTC = 1 μBTC = 1 microbitcoin (also referred to as ubit (pronounced yu-bit) or microbit)

For an overview of all proposed units of Bitcoin (including less common and niche units), see Units.

Further discussion on this topic can be found on the forums here:

  • We need names
  • What to call 0.001 BTC
  1. How does the halving work when the number gets really small?

Eventually, the reward will go from 0.00000001 BTC to zero and no more bitcoins will be created.

The block reward calculation is done as a right bitwise shift of a 64-bit signed integer, which means it is divided by two and rounded down. The integer is equal to the value in BTC * 100,000,000 since internally in the reference client software, all Bitcoin balances and values are stored as unsigned integers.

With an initial block reward of 50 BTC, it will take many 4-year periods for the block reward to reach zero.

  1. How long will it take to generate all the coins?

The last block that will generate coins will be blocked #6,929,999 which should be generated at or near the year 2140. The total number of coins in circulation will then remain static at 20,999,999.9769 BTC.

Even if the allowed precision is expanded from the current 8 decimals, the total BTC in circulation will always be slightly below 21 million (assuming everything else stays the same). For example, with 16 decimals of precision, the end total would be 20,999,999.999999999496 BTC.

  1. If no more coins are going to be generated, will more blocks be created?

Absolutely! Even before the creation of coins ends, the use of transaction fees will likely make creating new blocks more valuable from the fees than the new coins being created. When coin generation ends, these fees will sustain the ability to use bitcoins and the Bitcoin network. There is no practical limit on the number of blocks that will be mined in the future.

  1. If every transaction is broadcast via the network, does Bitcoin scale?

The blockchain base layer is not very scalable but layer-2 technologies can be used to greatly increase bitcoin’s scale. Lightning Network is one example which uses smart contracts to build a network where payments are routed along a path instead of flooded to every peer. These payments can be nearly as secure and irreversible as blockchain transactions but have much better scalability (as well support instant payments which are much more private). Other possible layer-2 scalability technologies are sidechains or a bitcoin ecash chaumian bank.

See also:

  • A trip to the moon requires a rocket with multiple stages
  • Capacity increases for the Bitcoin system
  • Scalability.

Economy

  1. Where does the value of Bitcoin stem from? What backs up Bitcoin?

Bitcoins have value because they are useful and because they are scarce. As they are accepted by more merchants, their value will stabilize. See the list of Bitcoin-accepting sites.

When we say that a currency is backed up by gold, we mean that there’s a promise in place that you can exchange the currency for gold. Bitcoins, like dollars and euros, are not backed up by anything except the variety of merchants that accept them.

It’s a common misconception that Bitcoins gain their value from the cost of electricity required to generate them. Cost doesn’t equal value – hiring 1,000 men to shovel a big hole in the ground may be costly, but not valuable. Also, even though scarcity is a critical requirement for a useful currency, it alone doesn’t make anything valuable. For example, your fingerprints are scarce, but that doesn’t mean they have any exchange value.

Alternatively, it needs to be added that while the law of supply and demand applies it does not guarantee the value of Bitcoins in the future. If confidence in Bitcoins is lost then it will not matter that the supply can no longer be increased, the demand will fall off with all holders trying to get rid of their coins. An example of this can be seen in cases of state currencies, in cases when the state in question dissolves and so no new supply of the currency is available (the central authority managing the supply is gone), however, the demand for the currency falls sharply because confidence in its purchasing power disappears. Of-course Bitcoins do not have such central authority managing the supply of the coins, but it does not prevent confidence from eroding due to other situations that are not necessarily predictable.

  1. Is Bitcoin a bubble?

Yes, in the same way as the euro and dollar are. They only have value in exchange and have no inherent value. If everyone suddenly stopped accepting your dollars, euros or bitcoins, the “bubble” would burst and their value would drop to zero. But that is unlikely to happen: even in Somalia, where the government collapsed 20 years ago, Somali shillings are still accepted as payment.

  1. Is Bitcoin a Ponzi scheme?

In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A Ponzi scheme is a zero-sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.

The fact that early adopters benefit more doesn’t alone make anything a Ponzi scheme. All good investments in successful companies have this quality.

  1. Doesn’t Bitcoin unfairly benefit early adopters?

Early adopters in Bitcoin are taking a risk and invested resources in an unproven technology. By so doing, they help Bitcoin become what it is now and what it will be in the future (hopefully, a ubiquitous decentralized digital currency). It is only fair they will reap the benefits of their successful investment.

In any case, any bitcoin generated will probably change hands dozens of time as a medium of exchange, so the profit made from the initial distribution will be insignificant compared to the total commerce enabled by Bitcoin. Many of the earliest users of Bitcoin have traded their coins at valuations below $1 US, or other amounts which are small compared to contemporary prices.

  1. Won’t a loss of wallets and the finite amount of Bitcoins create excessive deflation, destroying Bitcoin?

Worries about Bitcoin being destroyed by deflation are not entirely unfounded. Unlike most currencies, which experience inflation as their founding institutions create more and more units, Bitcoin will likely experience gradual deflation with the passage of time. Bitcoin is unique in that only a small amount of units will ever be produced (twenty-one million to be exact), this number has been known since the project’s inception, and the units are created at a predictable rate.

Also, Bitcoin users are faced with a danger that doesn’t threaten users of any other currency: if a Bitcoin user loses his wallet, his money is gone forever, unless he finds it again. And not just to him; it’s gone completely out of circulation, rendered utterly inaccessible to anyone. As people will lose their wallets, the total number of Bitcoins will slowly decrease.

Therefore, Bitcoin seems to be faced with a unique problem. Whereas most currencies inflate over time, Bitcoin will most likely do just the opposite. Time will see the irretrievable loss of an ever-increasing number of Bitcoins. An already small number will be permanently whittled down further and further. And as there become fewer and fewer Bitcoins, the laws of supply and demand suggest that their value will probably continually rise.

Thus Bitcoin is bound to once again stray into a mysterious territory,because no one exactly knows what happens to a currency that grows continually more valuable. Many economists claim that a low level of inflation is a good thing for a currency, but nobody is quite sure about what might happens to one that continually deflates. Although deflation could hardly be called a rare phenomenon, steady, constant deflation is unheard of. There may be a lot of speculation, but no one has any hard data to back up their claims.

That being said, there is a mechanism in place to combat the obvious consequences. Extreme deflation would render most currencies highly impractical: if a single Canadian dollar could suddenly buy the holder a car, how would one go about buying bread or candy? Even pennies would fetch more than a person could carry. Bitcoin, however, offers a simple and stylish solution: infinite divisibility. Bitcoins can be divided up and trade into as small of pieces as one wants, so no matter how valuable Bitcoins become, one can trade them in practical quantities.

In fact, infinite divisibility should allow Bitcoins to function in cases of extreme wallet loss. Even if, in the far future, so many people have lost their wallets that only a single Bitcoin, or a fraction of one, remains, Bitcoin should continue to function just fine. No one can claim to be sure what is going to happen, but deflation may prove to present a smaller threat than many expect.

For more information, see the Deflationary spiral page.

  1. What if someone bought up all the existing Bitcoins?

Bitcoin markets are competitive — meaning the price of a bitcoin will rise or fall depending on supply and demand at certain price levels. Only a fraction of bitcoins issued to date are found on the exchange markets for sale. So even though technically, a buyer with lots of money could buy all the bitcoins offered for sale, unless those holding the rest of the bitcoins offer them for sale as well, even the wealthiest, most determined buyer can’t get at them.

Additionally, new currency continues to be issued daily and will continue to do so for decades; though over time the rate at which they are issued declines to insignificant levels. Those who are mining aren’t obligated to sell their bitcoins so not all bitcoins will make it to the markets even.

This situation doesn’t suggest, however, that the markets aren’t vulnerable to price manipulation. It doesn’t take significant amounts of money to move the market price up or down, and thus Bitcoin remains a volatile asset.

  1. What if someone creates a new blockchain or a new digital currency that renders Bitcoin obsolete?

That the blockchain cannot be easily forked represents one of the central security mechanisms of Bitcoin. Given the choice between two block chains, a Bitcoin miner always chooses the longer one – that is to say, the one with the more complex hash. Thusly, it ensures that each user can only spend their bitcoins once and that no user gets ripped off.

As a consequence of the blockchain structure, there may at any time be many different sub-branches, and the possibility always exists of a transaction being over-written by the longest branch, if it has been recorded in a shorter one. The older a transaction is though, the lower its chances of being over-written, and the higher of becoming permanent. Although the blockchain prevents one from spending more Bitcoins than one has, it means that transactions can be accidentally nullified.

A new blockchain would leave the network vulnerable to double-spend attacks. However, the creation of a viable new chain presents considerable difficulty, and the possibility does not present much of a risk.

Bitcoin will always choose the longer Block Chain and determines the relative length of two branches by the complexities of their hashes. Since the hash of each new block is made from that of the block preceding it, to create a block with a more complex hash, one must be prepared to do more computation that has been done by the entire Bitcoin network from the fork point up to the newest of the blocks one is trying to supersede. Needless to say, such an undertaking would require a very large amount of processing power and since Bitcoin is continually growing and expanding, it will likely only require more with the passage of time.

A much more distinct and real threat to the Bitcoin use is the development of other, superior virtual currencies, which could supplant Bitcoin and render it obsolete and valueless.

A great deal of careful thought and ingenuity has gone into the development of Bitcoin, but it is the first of its breed, a prototype, and vulnerable to more highly-evolved competitors. At present, any threatening rivals have yet to rear their heads; Bitcoin remains the first and foremost private virtual currency, but we can offer no guarantees that it will retain that position. It would certainly be in keeping with internet history for a similar system built from the same principles to supersede and cast Bitcoin into obsolescence after time had revealed its major shortcomings. Friendster and Myspace suffered similar fates at the hand of Facebook, Napster was ousted by Limeware, Bearshare and torrent applications, and Skype has all but crushed the last few disciples of the Microsoft Messenger army.

This may sound rather foreboding, so bear in mind that the introduction of new and possibly better virtual currencies will not necessarily herald Bitcoin’s demise. If Bitcoin establishes itself sufficiently firmly before the inception of the next generation of private, online currencies so as to gain widespread acceptance and general stability, future currencies may pose little threat even if they can claim superior design. This is known as the network effect.

  1. Is Bitcoin open to value manipulation?

The current low market cap of Bitcoin means that any investor with deep enough pockets can significantly change/manipulate the rate. Is this a problem?

This is only a problem if you are investing in Bitcoin for a short period of time. A manipulator can’t change the fundamentals, and over a period of 5-10 years, the fundamentals will win over any short-term manipulations.

Sending and Receiving Payments

  1. Why do I have to wait 10 minutes before I can spend money I received?

10 minutes is the average time taken to find a block. It can be significantly more or less time than that depending on luck; 10 minutes is simply the average case.

Blocks (shown as “confirmations” in the GUI) are how the Bitcoin achieves consensus on who owns what. Once a block is found everyone agrees that you now own those coins, so you can spend them again. Until then it’s possible that some network nodes believe otherwise if somebody is attempting to defraud the system by reversing a transaction. The more confirmations a transaction has, the less risk there is of a reversal. Only 6 blocks or 1 hour is enough to make reversal computationally impractical. This is dramatically better than credit cards which can see chargebacks occur up to three months after the original transaction!

Ten minutes was specifically chosen by Satoshi as a tradeoff between first confirmation time and the amount of work wasted due to chain splits. After a block is mined, it takes time for other miners to find out about it, and until then they are actually competing against the new block instead of adding to it. If someone mines another new block based on the old blockchain, the network can only accept one of the two, and all the work that went into the other block gets wasted. For example, if it takes miners 1 minute on average to learn about new blocks, and new blocks come every 10 minutes, then the overall network is wasting about 10% of its work. Lengthening the time between blocks reduces this waste.

As a thought experiment, what if the Bitcoin network grew to include Mars? From the farthest points in their orbits, it takes about 20 minutes for a signal to travel from Earth to Mars. With only 10 minutes between new blocks, miners on Mars would always be 2 blocks behind the miners on Earth. It would be almost impossible for them to contribute to the blockchain. If we wanted to collaborate with those kinds of delays, we would need at least a few hours between new blocks.

  1. Do you have to wait until my transactions are confirmed in order to buy or sell things with Bitcoin?

YES, you do, IF the transaction is non-recourse. The Bitcoin reference software does not display transactions as confirmed until six blocks have passed (confirmations). As transactions are buried in the chain they become increasingly non-reversible but are very reversible before the first confirmation. Two to six confirmations are recommended for non-recourse situations depending on the value of the transactions involved.

When people ask this question they are usually thinking about applications like supermarkets. This generally is a recourse situation: if somebody tries to double-spend on a face-to-face transaction it might work a few times, but probabilistically speaking eventually one of the double-spends will get noticed, and the penalty for shoplifting charges in most localities is calibrated to be several times worse than the proceeds of a single shoplifting event.

Double-spends might be a concern for something like a snack machine in a low-traffic area with no nearby security cameras. Such a machine shouldn’t honor zero-confirmation payments, and should instead use some other mechanism of clearing Bitcoin or validating transactions against reversal, see the wiki article here for alternatives.

Applications that require immediate payment processing, like supermarkets or snack machines, need to manage the risks. Here is one way to reverse an unconfirmed payment:

A Finney attack is where an attacker mines a block containing a movement of some coins back to themselves. Once they find a block solution, they quickly go to a merchant and make a purchase, then broadcast the block, thus taking back the coins. This attack is a risk primarily for goods that are dispatched immediately, like song downloads or currency trades. Because the attacker can’t choose the time of the attack, it isn’t a risk for merchants such as supermarkets where you can’t choose exactly when to pay (due to queues, etc). The attack can fail if somebody else finds a block containing the purchasing transaction before you release your own block, therefore, merchants can reduce but not eliminate the risk by making purchasers wait some length of time that’s less than a confirm.

Because pulling off this attack is not trivial, merchants who need to sell things automatically and instantly are most likely to adjust the price to include the cost of reversal fraud or elect to use special insurance.

  1. I was sent some bitcoins and they haven’t arrived yet! Where are they?

Don’t panic! There are a number of reasons why your bitcoins might not show up yet, and a number of ways to diagnose them.

The latest version of the Bitcoin-Qt client tells you how far it has yet to go in downloading the blockchain. Hover over the icon in the bottom right corner of the client to learn your client’s status.

If it has not caught up then it’s possible that your transaction hasn’t been included in a block yet.

You can check pending transactions in the network by going here or here and then searching for your address. If the transaction is listed here then it’s a matter of waiting until it gets included in a block before it will show in your client.

If the transaction is based on a coin that was in a recent transaction then it could be considered a low priority transaction. Transfers can take longer if the transaction fee paid was not high enough. If there is no fee at all the transfer can get a very low priority and take hours or even days to be included in a block.

  1. I sent too small of a transaction fee, is my bitcoin lost forever?

If the transaction never gets confirmed into a block – the mempool expiry of all nodes will drop it eventually and you will be able to spend your funds again – typically it takes about 3 days or so for this to happen. If using an [SPV] wallet such as Electrum or Multibit, if after three days the wallet does not see the coin to spend, you need to reindex your wallet’s block headers. After reindexing, your wallet will see that the coin was never confirmed and thus the balance will be spendable again.

NOTE: From Bitcoin 0.14 “transaction reappearance” happens after 2 weeks.

  1. Why does my Bitcoin address keep changing?

See also: Address reuse

Unlike postal and email addresses, Bitcoin addresses are designed to be used exactly once only, for a single transaction. Originally, wallets would display only a single address at a time, and change it when a transaction was received, but an increasing number of wallet implementations now generate an address when you explicitly want to receive a payment.

While it is technically possible to use an address for an arbitrary number of payments, this works by accident and harms both yourself and other unrelated third parties, so it is considered a bad practice. The most important concerns with such misuse involve loss of privacy and security: both can be put into jeopardy when addresses are used for more than a single transaction only.

  1. How much will the transaction fee be? / Why is the fee so high?

Bitcoin transactions almost always require a transaction fee for them to get confirmed. The transaction fee is received by the first bitcoin miner who mines a block containing the transaction; this action is also what gives the transaction its first confirmation. The appropriate fee varies depending on how large (in bytes) your transaction is, how fast you want the transaction to be confirmed, and also on current network conditions. As such, paying a fixed fee, or even a fixed fee per kB, is a very bad idea; all good Bitcoin wallets will use several pieces of data to estimate an appropriate fee for you, though some are better at fee estimation than others.

The fee most strongly depends on the transaction’s data size. Fees do not depend on the BTC amount of the transaction — it’s entirely possible for a 0.01 BTC transaction to require a higher fee than a 1000 BTC transaction.

Basic intro to how Bitcoin transactions work: If you receive BTC in three separate transactions of (say) 1, 5, and 10 BTC, then you can think of your wallet as containing three gold coins with sizes 1, 5, and 10 BTC. If you then want to send 6 BTC, you can melt the 1 & 5 BTC coins together and recast them as a 6 BTC coin, or melt the 10 BTC coin and recast a 6 BTC coin for the recipient and a 4 BTC coin as change for yourself. In Bitcoin’s technical vocabulary, these objects are literally called input and output coins. (In the rest of this section, when we say “coin” we mean these objects, not the amount of BTC value.)

Transaction data sizes, and therefore fees, are proportional to the number (not value) of input and output coins in a transaction. Input coins are about 5x larger / more expensive than output coins.

If your wallet estimates a very high fee, it is most likely because your wallet is full of a whole bunch of tiny coins, so your transaction will need to take very many coins as inputs, increasing the cost. On the bright side, fees will go down once you make a few transactions since you will end up “melting down” these many small coins into a few larger ones. Sometimes you can significantly reduce the fee by sending less BTC: if you have like 1000 tiny faucet payments totaling 0.5 BTC and then 16.5 BTC from other sources, then you’ll find that sending ~16.5 BTC will be massively cheaper than sending a slightly higher value since it avoids including all of those faucet coins.

Fees also fluctuate depending on network conditions. All unconfirmed transactions compete with each other to be picked up by miners. If there are a lot of high-fee transactions being sent right now, then you will need to pay higher fees to out-bid them. On the other hand, if speed is less important to you, you can pay a somewhat smaller fee, and your transaction will float around until there is a period of reduced network usage. Sometimes even transactions with zero fee will be confirmed after a very long period of time, though this requires a perfect set of conditions, beyond what is explained here (ie. it probably won’t work if you try it).

Oftentimes wallets will have an “express” fee configuration but note that confirmation times are naturally random and unreliable. At any given point in time, the probability that no transactions will be confirmed in the next hour is about 0.25% (ie. it happens more than once per week on average). Bitcoin users should avoid getting into situations where their transactions absolutely must get 1 confirmation in the next couple of hours, even if high-fee transactions usually take less than 10 minutes to get 1 confirmation.

  1. What happens when someone sends me a bitcoin but my computer is powered off?

Bitcoins are not actually “sent” to your wallet; the software only uses that term so that we can use the currency without having to learn new concepts. Your wallet is only needed when you wish to spend coins that you’ve received.

If you are sent coins when your wallet client program is not running, and you later launch the wallet client program, the coins will eventually appear as if they were just received in the wallet. That is to say, when the client program is started it must download blocks and catch up with any transactions it did not already know about.

  1. How long does “synchronizing” take when the Bitcoin client is first installed? What’s it doing?

The popular Bitcoin client software from bitcoin.org implements a “full” Bitcoin node: It can carry out all the duties of the Bitcoin P2P system, it isn’t simply a “client”. One of the principles behind the operation of full Bitcoin nodes is that they don’t assume that the other participants have followed the rules of the Bitcoin system. During synchronization, the software is processing historical Bitcoin transactions and making sure for itself that all of the rules of the system have been correctly followed.

In normal operation, after synchronizing, the software should use a hardly noticeable amount of your computer’s resources.

When the wallet client program is first installed, its initial validation requires a lot of work from your computer’s hard disk, so the amount of time to synchronize depends on your disk speed and, to a lesser extent, your CPU speed. It can take anywhere from a few hours to a day or so. On a slow computer it could take more than 40 hours of continuous synchronization, so check your computer’s power-saving settings to ensure that it does not turn its hard disk off when unattended for a few hours. You can use the Bitcoin software during synchronization, but you may not see recent payments to you until the client program has caught up to the point where those transactions happened.

If you feel that this process takes too long, you can download a pre-synchronized blockchain from http://eu2.bitcoincharts.com/blockchain/. Alternatively, you can try an alternative “lite” client such as Multibit or a super-light client like electrum, though these clients have somewhat weaker security, are less mature, and don’t contribute to the health of the P2P network.

 

Mining

  1. What is mining?

Mining is the process of spending computation power to secure Bitcoin transactions against reversal and introducing new Bitcoins to the system.

Technically speaking, mining is the calculation of a hash of a block header, which includes among other things a reference to the previous block, a hash of a set of transactions and a nonce. If the hash value is found to be less than the current target (which is inversely proportional to the difficulty), a new block is formed and the miner gets the newly generated Bitcoins (25 per block at current levels). If the hash is not less than the current target, a new nonce is tried, and a new hash is calculated. This is done millions of times per second by each miner.

Help

 

Help

  1. I’d like to learn more. Where can I get help?
  • Read the introduction to bitcoin
  • See the videos, podcasts, and blog posts from the Press
  • Read and post on the forums
  • Chat on one of the Bitcoin IRC channels
  • Listen to this podcast, which goes into the details of how bitcoin works
  • Ask questions on the Bitcoin Stack Exchange
  • Use BitcoinX.io to help beginners learn about reputable Bitcoin exchanges and Bitcoin wallets