Bitcoin is electronic money

Bitcoin is the name of the open source software
enabling people/organisations to make payments to each other directly
without interference of any bank.

What is Bitcoin?

Electronic money, that is what ‘bitcoins’ are. Bitcoin is the name of the open source software enabling people/organisations – without interference of banks or other institutions – to make payments to each other directly. On this site you will find information regarding this digital currency and the way in which either entrepreneur or private person can make payments with it. Furthermore, Bitcoin Cold Storage will give you information on how to store your bitcoins safely or how to have them stored safely for you.


Bitcoins have been introduced in 2009; it is the first digital currency in a decentralized set-up. The entire Bitcoin network consists of other users who, just like you, use bitcoins. This decentralized set-up, combined with cast-iron encryption, ensures that bitcoin is a safe and free currency. 


Bitcoin relates to bitcoins just like email relates to emails. The Bitcoin protocol enables value to be transferred. Bitcoins are the actual units of value which are transferred during a transaction.

How does the Bitcoin network function?

The Bitcoin network uses a database spread out over the junctions of a peer-to-peer-network in order to monitor transactions on a daily basis. Next to that, cryptography is employed for the necessary safety. In this way bitcoins can only be spent by the person being the owner while at the same time that particular owner can only spend them once.


You can store Bitcoins yourself on a personal computer in a ‘wallet’-file or have them administered by a third party, a wallet service. In both cases the money can be transferred to another person via the internet by anyone with a Bitcoin address.

Economic rules

Within the Bitcoin network strict rules apply in order to guarantee safety:

  • The total amount of bitcoins in the whole world adds up to 21 million.
  • Transactions are cheap and usually free.
  • Bitcoins can be divided up to 8 decimals to a total amount of approximately 21×1014 units.

These rules are monitored by the entire Bitcoin network. Therefore, they cannot be changed within Bitcoin, however, for other digital means of payment, named alt-coins, different rules may be applicable.

 

Here you can have a look at the bitcoin source code (Classic version).

Tips for starting bitcoin users

  • Bitcoin is still in its infancy. Be aware of all the opportunities and all the risks involved in Bitcoin.
  • The same motto as for the stock market applies: “Do not invest in Bitcoins if you have no money to spare.”
  • Always encrypt your Bitcoin wallet.
  • Make back-ups regularly of your wallet and/or private keys.
  • Be careful with online Bitcoin services, do not put too much money on them. 
  • Always use different complex passwords for all your accounts.
  • The Bitcoin rate of exchange can fluctuate considerably; take that into account.
  • A Bitcoin transaction is irreversible, always check the data before making a payment. 
  • Keep in mind that one day the Inland Revenu may enquire into Bitcoin.