Bitcoin is a decentralized , non-sovereign and digital money. Check out the introduction by WeUseCoins below:
Why is Bitcoin Important
Here are five main reasons why Bitcoin matters:
- Highly Divisible
- Public Ledger of Transactions
- Decentralized
- Limited Supply
- Controlled Inflation
All Bitcoin transactions are kept on a public open ledger, called the Blockchain. The transactions are pseudo-anonymous because you can track where Bitcoins go but each address is not associated with an identy. Transactions are not limited to any geographical location so you can instantly send your bitcoins across borders with a minimal fee of 0.5mBTC (~$0.03). The largest known transaction was $150M worth of bitcoin with a transaction fee of $0.03.
Bitcoin is a decentralized payment system, meaning that I can send bitcoin directly to you without going through a middleman. The transactions are cryptographically hashed so as to make it hard for malicious participants to change the transaction history. The crypto-hashing process is called mining and many miners participate in the process to make it hard for any single point of attack on the mining network. Once a block of transactions is 'mined', the other miners make sure the hash is correct and form a consensus on the block. Consensus of 50% or more means that the block was accepted and added permanently to the public ledger.
Bitcoin is divisible up to 100,000,000 units, called Satoshis, per Bitcoin. The available supply of bitcoin is capped at 21 Millions coins for all time making Bitcoin digitally scarce. The programmers decided on this model to protect against inflation, increase in the monetary supply. The amount of Bitcoins in circulation as of this writing is 15,790,800 BTC, but slowly through the mining process 12.5 BTC per block is given out to miners who solve blocks.
Wallets to Use
Wallets maintain access to your private keys (cryptographic keys) and it is advised to always maintain ownership of your keys. You can only maintain ownership of your keys if you have a wallet that is not a third-party wallet such as Bitstamp, Coinbase or Uphold. For a final bit of advise on your wallet, always backup your keys and keep them in a safe place such as safe!
Incentives
While all of those new advances are nice but many people ask me what can I buy with Bitcoin? I am glad you asked! With Bitcoin you can shop at many merchants but Purse.io helps you save 15% - 50% off every purchase at Amazon.com. How is that possible? Well, people are gifted with Amazon gift cards but would rather not use them, so Purse allows them to buy your items from you in exchange for Bitcoin. You the buyer set your own discount rate and the gift card holder decides how much of a loss he is willing to take.
Another website, Foldapp, you can buy anything at Starbucks for 20% off. People sell their gift cards at a discounted rate in exchange for Bitcoin. The company is currently expanding their offerings to Target and Whole Foods in the next couple of months.
Recap
Bitcoin is a decentalized, digital currency. With Bitcoin you can take control of your funds and never worry that anyone else has control over them.