Pat Heyman

So what exactly is a Bitcoin?

At its core, Bitcoin is a distributed ledger system. Thousands of computers all over the world keep a copy of the ledger, which makes it extremely difficult to counterfeit. This distributed ledger system technology is known as the Blockchain. “Owning Bitcoin” is basically owning the ledger entry.

So what’s a Cryptocurrency?

Let’s sum up first. Bitcoins are ownership of ledger entries in a distributed blockchain. The process of discovering new ledger blocks and verifying new entries for existing blocks is called mining and based on solving complicated math problems.

Okay, so how do I get my mitts on some Bitcoin?

There are essentially three (and a half) ways to obtain Bitcoin. (These will apply to pretty much all of the alt-coins to some degree). The first is to mine it as described above. (The half is to mine another cryptocurrency and then exchange it for Bitcoin).

Tell me what’s wrong with Coinbase?

The unfair complaints have to do with privacy as Coinbase complies with IRS regulations that govern financial institutions. That’s what allows them to take dollars in the first place. Other complaints include that it’s relatively slow and the fees are higher than other services. This is somewhat true, but it’s still the easiest way to acquire some Bitcoin.

What’s this about a wallet?

Bitcoin is “owned” by being recorded to a particular Bitcoin address (series of letters and numbers). A Bitcoin wallet generates an address (or multiple addresses) and calculates how much bitcoin is recorded to each address to generate a spendable balance. When you pay someone, your wallet authorizes the transaction. The magic is contained in a pair of keys, called public and private keys.