Bitcoin Flashcards
What is Bitcoin?
It’s a decentralized digital currency created in 2009 by an anonymous person/group using the pseudonym Satoshi Nakamoto. It operates on a peer-to-peer network without the need for intermediaries.
How does Bitcoin work?
It uses blockchain technology – a distributed ledger that records all transactions across a network of computers. Every transaction is verified by network nodes through cryptography.
What are Bitcoin miners?
Miners are people/entities who use powerful computers to solve complex mathematical problems, validating transactions and creating new bitcoins. They’re rewarded with newly created bitcoins and transaction fees.
What is Bitcoin’s maximum supply?
Only 21 million bitcoins can ever be created. As of 2024, about 19.6 million have been mined. The last bitcoin will be mined around 2140.
What is a Bitcoin wallet?
It’s a digital tool that allows you to store, send, and receive bitcoins. It contains your private keys – the passwords that give you access to your bitcoins.
What determines Bitcoin’s price?
Like any asset, supply and demand drive Bitcoin’s price. Factors include adoption rates, regulatory news, technological developments, and market sentiment.
What’s a Bitcoin halving?
Every four years, the reward miners receive for mining new blocks is cut in half. This reduces the rate at which new bitcoins are created, making it more scarce over time.
Is Bitcoin anonymous?
Not entirely. While transactions don’t show real names, they’re recorded on a public blockchain. Every transaction can be traced, making it pseudonymous rather than anonymous.
What makes Bitcoin valuable?
Its value comes from its limited supply, decentralization, security features, growing acceptance, and the network of users who believe in its worth as a store of value and medium of exchange.
How is Bitcoin different from traditional currency?
It’s not controlled by any government or central bank, has a fixed supply, and can be transferred globally without intermediaries like banks.
What is a Bitcoin address?
It’s a unique string of letters and numbers (like an email address) that you give to people so they can send you bitcoin.
Can Bitcoin be hacked?
While the Bitcoin network itself has never been hacked, exchanges and wallets can be compromised. The blockchain’s decentralized nature makes it extremely secure.
What’s the environmental impact of Bitcoin?
Bitcoin mining consumes significant electricity. However, miners increasingly use renewable energy sources to reduce their environmental impact.
What is the Lightning Network?
It’s a “layer 2” payment protocol that operates on top of Bitcoin, enabling faster and cheaper transactions by processing them off the main blockchain.
What’s a private key?
It’s a secret number that allows you to spend your bitcoins. If someone gets your private key, they can steal your bitcoins.
