(Australian Associated Press)
*WHAT IS A SINGLE UNIT OF BITCOIN
A extremely complex software code.
*WHERE DO THEY COME FROM
Bitcoins were designed by an unknown person, or persons, known as Satoshi Nakamoto in 2009. They’re hidden in an encrypted computer program, from which they’re mined by computers.
To mine a bitcoin a computer must solve an extremely complex mathematical problem, which gets harder each time a new coin is found.
Today only massive amounts of computing power can solve the difficult problems.
Companies set up for the sole purpose of bitcoin mining exist, and yes they consist primarily of rooms full of computers trying to solve the equations.
HOW MANY BITCOINS EXIST
There are currently 11 million in circulation and only 21 million will ever be mined, in accordance with the program creator’s rules.
WHAT ARE THEY WORTH
The price of bitcoins wildly fluctuates, but they were worth $857 at the time of publication.
WHO DECIDES WHAT THEY’RE WORTH
The users – the price of bitcoins is determined by market supply and demand. But rather than thinking about the value of bitcoins like real money, they’re better viewed as a commodity like gold.
HOW DO PEOPLE GET BITCOINS
Bitcoins can be bought online with cash from bitcoin traders and many businesses accept them as a form of payment for goods or services.
Bitcoin atms also exist where people can insert money to buy them, or sell their bitcoins and withdraw cash.
WHERE DO YOU KEEP THEM
Bitcoins are stored in a bitcoin wallet, which is run by a third-party website, like a bank account.
They have added protection in that all bitcoin users can view and approve every transaction in a network, known as the blockchain.
(Source: CoinDesk.com, Bitcoin.org, Bitcoin Foundation, Khan Academy and MarketWatch.com)