Welcome; this page was designed to help you understand Bitcoin on a basic level. We designed the website to be easy to read and understand. As you go through the website, we will cover a brief history of Bitcoin, a short explanation of what Bitcoin is, why bitcoin, where to get Bitcoin, the hows of Bitcoin, the whos of Bitcoin, and the whens of bitcoin.
We have also included additional pages, including Advanced info for those looking for more, a Q&A page where we answer important questions, including questions asked by our community. There is a page dedicated to Bitcoin art in all forms, and if you would like to contribute, please get in touch with us.
The idea for cryptocurrency emerged in 1983 when cryptographer David Chaum published a conference paper that outlined an early form of anonymous cryptographic digital money. The idea was for a digital currency that could be sent untraceable and in a manner that did not require centralized entities (i.e., banks). In 1995, Chaum expanded on his early ideas and developed a proto-cryptocurrency named Digicash. It needed user software to withdraw funds from a bank. You had to have specific encrypted keys before transferring funds to a recipient.
Bit Gold, which Nick Szabo designed in 1998, 10 years before Bitcoin, was deemed a direct precursor to Bitcoin. It required a participant to dedicate computer power to solving cryptographic problems, and those who solved the problems received a reward.
The issue was Szabo could not solve the infamous double-spending problem (digital data can be copied and pasted) without using a central authority. Ten years later, a mysterious person or group, using the pseudonym Satoshi Nakamoto, published a white paper called “Bitcoin – A Peer to Peer Electronic Cash System.”
October 31, 2008, Satoshi Nakamoto published the Bitcoin white paper describing the functionality of the Bitcoin network. Satoshi formally began work on the bitcoin project on August 18, 2008, when they purchased Bitcoin.org.
Satoshi Nakamoto mined the first block of the Bitcoin network on January 3, 2009. The initial block contained the headline from The Times Newspaper. This headline referenced the economic conditions involving bank bailouts and a centralized financial system.
The first block is named the Genesis Block. Bitcoin had virtually no value at this time and for the first few months of its existence. Six months after bitcoin became exchangeable, in April 2010, the value of one BTC was just under 14 cents. By early November, the price bubbled to 36 cents before settling at around 29 cents.
What is Bitcoin - Bitcoin is an open source software anyone can download and run on their computer. As people download and run this software, their computers communicate with each other creating a network. Bitcoin is not a currency; currency is just the first application. Most people think of bitcoin as being a cryptocurrency. But it is much more than that, just like the internet is more than just e-mail. Bitcoin is a digital form of value that can be transferred without permission, safely, securely, fast, and for relatively cheap.
Bitcoin is a digital asset you can own like you would own gold. But unlike gold, you can exchange your bitcoin instantaneously 24/7. The Canadian government calls bitcoin a "digital asset." If you trade bitcoin for more than you acquired it, you may only need to pay capital gains tax. Capital gains tax is calculated more favorably than personal income tax.
Like most assets, houses, precious metals, collectibles, land, and stocks, to name a few. Bitcoin is used as a store of value that hopefully increases over time versus the Canadian Dollar.
Bitcoin is a form of digital currency. The CRA treats it like a barter transaction when you use a digital currency like bitcoin to pay for goods and services. A barter transaction occurs when two parties exchange goods and services without legal tender.
Bitcoin isn't money; it's not a product, it's not a service you would sign up for, it's not a company, and it is not a currency. Currency is just the first application built upon the Bitcoin network that can be run without a central point of control.
Bitcoin is scarce like land; there will only ever be a maximum of 21,000,000 mined. The last bitcoin will be mined around the year 2140. This feature was built right into the code of bitcoin to mimic gold.
Owning bitcoin allows you to add more diversification to your net worth. People who diversify their net worth reduce risk by investing in vehicles that cover various asset classes. Bitcoin can lead to better opportunities, the enjoyment of learning about a new asset class, and a higher risk-adjusted return.
Exchanges: There are hundreds of exchanges that you can get Bitcoin from (502 as of writing this). We will only cover the ones we have used and give our opinions on them. There are centralized exchanges controlled by a central point of authority and decentralized exchanges with no central point of control. Typically as someone new, you will use a centralized exchange because of its ease of use. But not long in the future, more and more development on decentralized exchanges will make them a more popular option. List of exchanges
Bitcoin Machines: Thousands of bitcoin bank machines are available for people who do not want to use an exchange. A simple google search will allow you to locate all the local BTC machines.
Earn: You can always sell products or services in order to earn Bitcoin
There are many ways to exchange bitcoin. The method used most is through a centralized exchange. You will need to give them information on who you are and prove your identification. This is because most exchanges follow the rules of their jurisdiction. They are required to follow KYC (Know Your Customer) guild lines set out by the government. This ensures you are not using Bitcoin for money laundering or terrorist financing.
When someone installs a bitcoin wallet on the phone or computer, it generates a bitcoin address. You can then create as many bitcoin addresses for whatever need you will have for them. When you have a Bitcoin address, you can give it to things like work, businesses, or people who want to send you bitcoin. There are many different technologies that go into Bitcoin. Blockchain technology, cryptographic keys, Cryptography, and more. These all could take hours of study to master individually, but we will keep it basic.
Block Chain - There are many blockchains, and bitcoin isn't the first blockchain to ever be made. Describing Bitcoin as just blockchain technology would be like relating a motor vehicle to the technology of transmissions. Although it is a vital part of Bitcoin, it is not the only technology bitcoin uses.
Block Chains are digital ledgers used to record things like transactions or perhaps moves in a game of chess. Bitcoins blockchain creates a new immutable block of transactions every 10 minutes.
It is best to start by explaining that you don't store or hold your bitcoin. You store the keys to your Bitcoin. You will hold two types of keys for your bitcoin: public and private keys. Public keys are the ones you will share to receive bitcoin. Private keys are used to send bitcoin and should be kept secure.
As for securing your private keys, there are many methods. The main ways we would like to focus on are hardware wallets and paper wallets. It would be best if you did not store large amounts of bitcoin on an exchange or third-party custodian. "Storing" bitcoin on an exchange means you no longer hold the keys to your bitcoin. Not your keys, not your crypto.
Satoshi Nakamoto is a person or group that goes by a pseudonym. Satoshi was still publicly part of Bitcoins development till December 2010.
Bitcoin is open-source software that has been developed for anyone and everyone to use. Some countries may require a VPN.
We are going to compile a list of important people in Bitcoins development. .