Bitcoin Forum

What is Bitcoin?

   Bitcoin is a free (as in speech and as in beer) program that allows you to securely and anonymously send money over the Internet – without paying any fees.

Why would anyone make something that useful and give it away for free?

   Bitcoin's creator original Satoshi Nakamoto believed in the principals of [Free Software]. He felt the need for something to exist, so he made it. Now he shares both the software and it's underlying code with everyone, so that others may learn from and improve upon his work.

How do I use Bitcoin?

   First off, download the program from the [project website]. Once you have it installed, you can get your first 0.05 BTC for free from [Bitcoin Tap], and then purchase more at [an exchange]. Now open the program, click send, and enter an address and amount. You will receive Bitcoins automatically when they are sent to you, even if your computer is off.

How does Bitcoin Work?

   Think of a single Bitcoin as a large sheet of paper watermarked with a serial number. To send a Bitcoin to someone, you write their name on the paper, sign it like a check, and then post a copy in a public location. They can then resend it to someone else, and so on.

Wait, I thought you said “anonymously”!

   Although every transaction is publicly visible, it is in most cases impossible to trace a Bitcoin address back to an individual. Also, you may create a new address for yourself at any time.

Does this mean Bitcoins aren't divisible?

   Not at all! The actual process if far more complicated than that (and automated). Rest assured that your Bitcoin transfers are accurate to 8 decimal places.

What stops the same coin from being sent to two people?

   Because every Bitcoin user keeps a log of every transaction, this would be noticed immediately, and only one person would actually get the money. To be safe, don't assume you have actually received a payment until it is marked with at least 1 confirmation.

What is Bitcoin Mining?
   
   The Bitcoin network has no centralized infrastructure, but rather depends on the contributions of individual users to function. You can contribute to the network be checking generate Bitcoins and [forwarding a port], and you will be [paid modestly] for doing so.

Where are my Bitcoins stored?

   On the your hard drive. Make sure to backup frequently! Alternatively, you can place them in a [wallet service] for safe keeping and easy access from other computers.

Hey, I though you said “without paying any fees”!

   Transaction fees are entirely optional and often unnecessary. You can, however, specify a fee to pay from the option menu, which usually results in your transactions clearing faster.

Why are addresses so long?

   Addresses are randomly generated so as to preserve anonymity, and lengthy to ensure security. Use the address book feature to keep track of them.

How long does it take so long for transactions to clear?

   A transaction will register almost instantly, but to prevent double-dealing and other deception, it must be verified at least once before being considered complete, and six times before being considered confirmed. One verification takes approximately 10 minutes. Far better than the 3-5 days for a check, huh?

I think the fees system is still something of an open question at this point. It's not clear what the eventual cost of mining will be and to what extent miners will rely on/be motivated by fees, and how much a per tx fee might cost (if anything).

It'd be fair to say that today, there are no fees, but very small fees might appear in future.

It'd be fair to say that today, there are no fees, but very small fees might appear in future.