Answers to your most frequently asked questions
Our legacy financial systems, including PayPal & Venmo, are centralized and thus rely on trusted third-parties. This means that rather than interact with others directly, all transactions go through them. This allows banks and other services to reverse transactions, censor how you can spend your money, and even freeze your account. Bitcoin is a decentralized peer-to-peer network which gives you complete control of your money. It is apolitical, meaning it doesn’t care who you are, where you are, or how you want to use your Bitcoin. You are in complete control.
A Bitcoin can be divided into 100,000,000 units (0.00000001 BTC = 1 Satoshi). Almost all transactions are fractions of a Bitcoin.
Anyone can mine Bitcoin. Anyone who runs a specific program on their computer helps to secure the network and process transactions. Anyone who does so is rewarded by earning Bitcoin. While you can run this software on any machine, it is very competitive and almost all mining nowadays is done with specialized equipment.
No one knows. The founder used the pseudonym Satoshi Nakamoto, and was careful to keep his or her identity secret. Less than two years after the project began, he or she left, claiming the project should never have a single leader. No one knows what happened to Satoshi.
No problem. If you’ve written down your seed, then you will be able to restore your wallet on another device.
No. It’s pseudonymous, meaning that addresses do not have names attached. However, the Bitcoin blockchain is transparent. All addresses and their histories can be viewed on any Bitcoin blockchain explorer.
Maybe. Maybe not. This is an unprecedented innovation, and while we think it will be wildly successful, no one knows the future. Anyone who claims they do is either a fool or a liar.
This is an experiment on the grandest scale. If it achieves its full potential, it’s likely to be worth orders of magnitude more than it is today. It’s also possible that it will fail, or be replaced and worth little or nothing. We are currently in a price discovery phase that is normal for any new asset. With time, as its success or failure becomes more certain, the volatility should lessen.
If it’s not a valid address, the software will stop you from sending. But ultimately, if you make a mistake, you are responsible and transactions can never be reversed. With power comes responsibility.
The lightning network is a second layer technology applied to bitcoin that uses micropayment channels to scale its blockchain’s capability to conduct transactions more efficiently. Transactions conducted on lightning networks are faster, less costly, and more readily confirmed than those conducted directly on the bitcoin blockchain (i.e., on-chain).
Nobody owns the Bitcoin network, much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can’t force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.
Bitcoin does use large amounts of energy. However, since that energy does not need to be created near human population centers, and the Bitcoin network only cares about cost much of the network uses renewable energy, many believe Bitcoin will actually speed the world’s transition to renewable energy.