What is bitcoin you might ask?
Bitcoin is a payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009. The system is peer-to-peer; users can transact directly without needing an intermediary. Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses its own unit of account, also called bitcoin. The system works without a central repository or single administrator, which has led the US Treasury to categorize it as a decentralized virtual currency. Bitcoin is often called the first cryptocurrency, although prior systems existed. Bitcoin is more correctly described as the first decentralized digital currency. It is the largest of its kind in terms of total market value.
Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into the public ledger. This activity is called mining and the miners are rewarded with transaction fees and newly created bitcoins. Right now miners are paid about 25 bitcoins per block mined. When the goal of 21 million Bitcoins have been released into the market, miners will be paid by the transaction fees. Besides mining, bitcoins can be obtained in exchange for different currencies, products, and services. Users can send and receive bitcoins for an optional transaction fee. Don't worry, the transaction fees will not become incredibly important until the year 2110-2140 when all bitcoins have been distributed.
For more information I have found this page on Wikipedia extremely useful!
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