The: Daniel ⚡️ on Nostr: Yeah, it actually used to be this easy, but most of us were oblivious. ...
Yeah, it actually used to be this easy, but most of us were oblivious.
quoting nevent1q…0u4q## The answer to these bitcoin questions comes from an email correspondence between Martti Malmi and Bitcoin founder Satoshi Nakamoto on May 4, 2009. Although it has been 15 years, looking back now, it is still a timeless, simple and classic answer. Share it with everyone.
Address: https://mmalmi.github.io/satoshi/
**** Bitcoin FAQ ****
General Questions
# 1 What is bitcoin?
Bitcoin is a peer-to-peer network based anonymous digital currency. Peer-to-peer (P2P) means that there is no central authority to issue new money or to keep track of the transactions. Instead, those tasks are managed collectively by the nodes of the network. Anonymity means that the real world identity of the parties of a transaction can be kept hidden from the public or even from the parties themselves.
# 2 How does bitcoin work?
Bitcoin utilizes public/private key cryptography. When a coin is transfered from user A to user B, A adds B's public key to the coin and signs it with his own private key. Now B owns the coin and can transfer it further. To prevent A from transfering the
already used coin to another user C, a public list of all the previous transactions is collectively maintained by the network of bitcoin nodes, and before each transaction the coin's unusedness will be checked.
For details, see chapter Advanced Questions.
# 3 What is bitcoin's value backed by?
Bitcoin is valued for the things it can be exchanged to, just like all the traditional paper currencies are.
When the first user publicly announces that he will make a pizza for anyone who gives him a hundred bitcoins, then he can use
bitcoins as payment to some extent - as much as people want pizza and trust his announcement. A pizza-eating hairdresser who trusts him as a friend might then announce that she starts accepting bitcoins as payment for fancy haircuts, and the value of the bitcoin would be higher - now you could buy pizzas and haircuts with them. When bitcoins have become accepted widely enough, he could retire from his pizza business and still be able to use his bitcoin-savings.
# 4 How are new bitcoins created?
New coins are generated by a network node each time it finds the solution to a certain calculational problem. In the first 4 years of the bitcoin network, amount X of coins will be created. The amount is halved each 4 years, so it will be X/2 after 4 years,
X/4 after 8 years and so on. Thus the total number of coins will approach 2X.
# 5 Is bitcoin safe?
Yes, as long as you make backups of your coin keys, protect them with strong passwords and keep keyloggers away from your computer. If you lose your key or if some unknown attacker manages to unlock it, there's no way to get your coins back. If
you have a large amount of coins, it is recommended to distribute them under several keys. You propably wouldn't either keep all your dollars or euros as paper in a single wallet and leave it unguarded.
# 6 Why should I use bitcoin?
• Transfer money easily through the internet, without having to trust third parties.
• Third parties can't prevent or control your transactions.
• Be safe from the unfair monetary policies of the monopolistic central banks and the other risks of centralized power over a money supply. The limited inflation of the bitcoin system's money supply is distributed evenly (by CPU power) throughout the network, not monopolized to a banking elite.
• Bitcoin's value is likely to increase as the growth of the bitcoin economy exceeds the inflation rate - consider bitcoin an investment and start running a node today!
# 7 Where can I get bitcoins?
Find a bitcoin owner and sell her something - MMORPG equipement, IT support, lawn mowing, dollars or whatever you can trade with her. You can also generate new bitcoins for yourself by running a bitcoin network node.