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 Bitcoin is an innovative payment network and a new kind of money.Bitcoin  uses peer-to-peer technology to operate with no central authority or  banks; managing transactions and the issuing of bitcoins is carried out  collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.How does Bitcoin work?From  a user perspective, Bitcoin is nothing more than a mobile app or  computer program that provides a personal Bitcoin wallet and allows a  user to send and receive bitcoins with them. This is how Bitcoin works  for most users.Behind the scenes, the Bitcoin network is sharing a  public ledger called the "block chain". This ledger contains every  transaction ever processed, allowing a user’s computer to verify the  validity of each transaction. The authenticity of each transaction is  protected by digital signatures corresponding to the sending addresses,  allowing all users to have full control over sending bitcoins from their  own Bitcoin addresses. In addition, anyone can process transactions  using the computing power of specialized hardware and earn a reward in  bitcoins for this service. This is often called "mining". To learn more  about Bitcoin, you can consult the dedicated page and the original  paper.Who created Bitcoin?Bitcoin  is the first implementation of a concept called "cryptocurrency", which  was first described in 1998 by Wei Dai on the cypherpunks mailing list,  suggesting the idea of a new form of money that uses cryptography to  control its creation and transactions, rather than a central authority.  The first Bitcoin specification and proof of concept was published in  2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left  the project in late 2010 without revealing much about himself. The  community has since grown exponentially with many developers working on  Bitcoin.Satoshi’s anonymity often raised unjustified concerns,  many of which are linked to misunderstanding of the open-source nature  of Bitcoin. The Bitcoin protocol and software are published openly and  any developer around the world can review the code or make their own  modified version of the Bitcoin software. Just like current developers,  Satoshi’s influence was limited to the changes he made being adopted by  others and therefore he did not control Bitcoin. As such, the identity  of Bitcoin’s inventor is probably as relevant today as the identity of  the person who invented paper.Who controls the Bitcoin network?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.Is Bitcoin really used by people?Yes.  There is a growing number of businesses and individuals using Bitcoin.  This includes brick and mortar businesses like restaurants, apartments,  law firms, and popular online services such as Namecheap, WordPress, and  Reddit. While Bitcoin remains a relatively new phenomenon, it is  growing fast. At the end of August 2013, the value of all bitcoins in  circulation exceeded US$ 1.5 billion with millions of dollars worth of  bitcoins exchanged daily.How does one acquire bitcoins?

• As payment for goods or services.
• Purchase bitcoins at a Bitcoin exchange.
• Exchange bitcoins with someone near you.
• Earn bitcoins through competitive mining.

While  it may be possible to find individuals who wish to sell bitcoins in  exchange for a credit card or PayPal payment, most exchanges do not  allow funding via these payment methods. This is due to cases where  someone buys bitcoins with PayPal, and then reverses their half of the  transaction. This is commonly referred to as a chargeback.How difficult is it to make a Bitcoin payment?Bitcoin  payments are easier to make than debit or credit card purchases, and  can be received without a merchant account. Payments are made from a  wallet application, either on your computer or smartphone, by entering  the recipient’s address, the payment amount, and pressing send. To make  it easier to enter a recipient’s address, many wallets can obtain the  address by scanning a QR code or touching two phones together with NFC  technology.What are the advantages of Bitcoin?

• Payment  freedom - It is possible to send and receive any amount of money  instantly anywhere in the world at any time. No bank holidays. No  borders. No imposed limits. Bitcoin allows its users to be in full  control of their money.
• Very low fees - Bitcoin payments are  currently processed with either no fees or extremely small fees. Users  may include fees with transactions to receive priority processing, which  results in faster confirmation of transactions by the network.  Additionally, merchant processors exist to assist merchants in  processing transactions, converting bitcoins to fiat currency and  depositing funds directly into merchants’ bank accounts daily. As these  services are based on Bitcoin, they can be offered for much lower fees  than with PayPal or credit card networks.
• Fewer risks for  merchants - Bitcoin transactions are secure, irreversible, and do not  contain customers’ sensitive or  personal information. This protects merchants from losses caused by  fraud or fraudulent chargebacks, and there is no need for PCI  compliance. Merchants can easily expand to new markets where either  credit cards are not available or fraud rates are unacceptably high. The  net results are lower fees, larger markets, and fewer administrative  costs.
• Security and control - Bitcoin users are in full control  of their transactions; it is impossible for merchants to force unwanted  or unnoticed charges as can happen with other payment methods. Bitcoin  payments can be made without personal information tied to the  transaction. This offers strong protection against identity theft.  Bitcoin users can also protect their money with backup and encryption.
• Transparent  and neutral - All information concerning the Bitcoin money supply  itself is readily available on the block chain for anybody to verify and  use in real-time. No individual or organization can control or  manipulate the Bitcoin protocol because it is cryptographically secure.  This allows the core of Bitcoin to be trusted for being completely  neutral, transparent and predictable.

What are the disadvantages of Bitcoin?

• Degree  of acceptance - Many people are still unaware of Bitcoin. Every day,  more businesses accept bitcoins because they want the advantages of  doing so, but the list remains small and still needs to grow in order to  benefit from network effects.
• Volatility - The total value of  bitcoins in circulation and the number of businesses using Bitcoin are  still very small compared to what they could be. Therefore, relatively  small events, trades, or business activities can significantly affect  the price. In theory, this volatility will decrease as Bitcoin markets  and the technology matures. Never before has the world seen a start-up  currency, so it is truly difficult (and exciting) to imagine how it will  play out.
• Ongoing development - Bitcoin software is still in  beta with many incomplete features in active development. New tools,  features, and services are being developed to make Bitcoin more secure  and accessible to the masses. Some of these are still not ready for  everyone. Most Bitcoin businesses are new and still offer no insurance.  In general, Bitcoin is still in the process of maturing.

Why do people trust Bitcoin?Much  of the trust in Bitcoin comes from the fact that it requires no trust  at all. Bitcoin is fully open-source and decentralized. This means that  anyone has access to the entire source code at any time. Any developer  in the world can therefore verify exactly how Bitcoin works. All  transactions and bitcoins issued into existence can be transparently  consulted in real-time by anyone. All payments can be made without  reliance on a third party and the whole system is protected by heavily  peer-reviewed cryptographic algorithms like those used for online  banking. No organization or individual can control Bitcoin, and the  network remains secure even if not all of its users can be trusted.Can I make money with Bitcoin?You  should never expect to get rich with Bitcoin or any emerging  technology. It is always important to be wary of anything that sounds  too good to be true or disobeys basic economic rules.Bitcoin is a  growing space of innovation and there are business opportunities that  also include risks. There is no guarantee that Bitcoin will continue to  grow even though it has developed at a very fast rate so far. Investing  time and resources on anything related to Bitcoin requires  entrepreneurship. There are various ways to make money with Bitcoin such  as mining, speculation or running new businesses. All of these methods  are competitive and there is no guarantee of profit. It is up to each  individual to make a proper evaluation of the costs and the risks  involved in any such project.Is Bitcoin fully virtual and immaterial?Bitcoin  is as virtual as the credit cards and online banking networks people  use everyday. Bitcoin can be used to pay online and in physical stores  just like any other form of money. Bitcoins can also be exchanged in  physical form such as the Casascius coins, but paying with a mobile  phone usually remains more convenient. Bitcoin balances are stored in a  large distributed network, and they cannot be fraudulently altered by  anybody. In other words, Bitcoin users have exclusive control over their  funds and bitcoins cannot vanish just because they are virtual.Is Bitcoin anonymous?Bitcoin  is designed to allow its users to send and receive payments with an  acceptable level of privacy as well as any other form of money. However,  Bitcoin is not anonymous and cannot offer the same level of privacy as  cash. The use of Bitcoin leaves extensive public records. Various  mechanisms exist to protect users’ privacy, and more are in development.  However, there is still work to be done before these features are used  correctly by most Bitcoin users.Some concerns have been raised  that private transactions could be used for illegal purposes with  Bitcoin. However, it is worth noting that Bitcoin will undoubtedly be  subjected to similar regulations that are already in place inside  existing financial systems. Bitcoin cannot be more anonymous than cash  and it is not likely to prevent criminal investigations from being  conducted. Additionally, Bitcoin is also designed to prevent a large  range of financial crimes.What happens when bitcoins are lost?When  a user loses his wallet, it has the effect of removing money out of  circulation. Lost bitcoins still remain in the block chain just like any  other bitcoins. However, lost bitcoins remain dormant forever because  there is no way for anybody to find the private key(s) that would allow  them to be spent again. Because of the law of supply and demand, when  fewer bitcoins are available, the ones that are left will be in higher  demand and increase in value to compensate.Can Bitcoin scale to become a major payment network?The  Bitcoin network can already process a much higher number of  transactions per second than it does today. It is, however, not entirely  ready to scale to the level of major credit card networks. Work is  underway to lift current limitations, and future requirements are well  known. Since inception, every aspect of the Bitcoin network has been in a  continuous process of maturation, optimization, and specialization, and  it should be expected to remain that way for some years to come. As  traffic grows, more Bitcoin users may use lightweight clients, and full  network nodes may become a more specialized service. For more details,  see the Scalability page on the Wiki.Is Bitcoin legal?To  the best of our knowledge, Bitcoin has not been made illegal by  legislation in most jurisdictions. However, some jurisdictions (such as  Argentina and Russia) severely restrict or ban foreign currencies. Other  jurisdictions (such as Thailand) may limit the licensing of certain  entities such as Bitcoin exchanges.Regulators from various  jurisdictions are taking steps to provide individuals and businesses  with rules on how to integrate this new technology with the formal,  regulated financial system. For example, the Financial Crimes  Enforcement Network (FinCEN), a bureau in the United States Treasury  Department, issued non-binding guidance on how it characterizes certain  activities involving virtual currencies.Is Bitcoin useful for illegal activities?Bitcoin  is money, and money has always been used both for legal and illegal  purposes. Cash, credit cards and current banking systems widely surpass  Bitcoin in terms of their use to finance crime. Bitcoin can bring  significant innovation in payment systems and the benefits of such  innovation are often considered to be far beyond their potential  drawbacks.Bitcoin is designed to be a huge step forward in making  money more secure and could also act as a significant protection  against many forms of financial crime. For instance, bitcoins are  completely impossible to counterfeit. Users are in full control of their  payments and cannot receive unapproved charges such as with credit card  fraud. Bitcoin transactions are irreversible and immune to fraudulent  chargebacks. Bitcoin allows money to be secured against theft and loss  using very strong and useful mechanisms such as backups, encryption, and  multiple signatures.Some concerns have been raised that Bitcoin  could be more attractive to criminals because it can be used to make  private and irreversible payments. However, these features already exist  with cash and wire transfer, which are widely used and  well-established. The use of Bitcoin will undoubtedly be subjected to  similar regulations that are already in place inside existing financial  systems, and Bitcoin is not likely to prevent criminal investigations  from being conducted. In general, it is common for important  breakthroughs to be perceived as being controversial before their  benefits are well understood. The Internet is a good example among many  others to illustrate this.Can Bitcoin be regulated?The  Bitcoin protocol itself cannot be modified without the cooperation of  nearly all its users, who choose what software they use. Attempting to  assign special rights to a local authority in the rules of the global  Bitcoin network is not a practical possibility. Any rich organization  could choose to invest in mining hardware to control half of the  computing power of the network and become able to block or reverse  recent transactions. However, there is no guarantee that they could  retain this power since this requires to invest as much than all other  miners in the world.It is however possible to regulate the use of  Bitcoin in a similar way to any other instrument. Just like the dollar,  Bitcoin can be used for a wide variety of purposes, some of which can  be considered legitimate or not as per each jurisdiction’s laws. In this  regard, Bitcoin is no different than any other tool or resource and can  be subjected to different regulations in each country. Bitcoin use  could also be made difficult by restrictive regulations, in which case  it is hard to determine what percentage of users would keep using the  technology. A government that chooses to ban Bitcoin would prevent  domestic businesses and markets from developing, shifting innovation to  other countries. The challenge for regulators, as always, is to develop  efficient solutions while not impairing the growth of new emerging  markets and businesses.What about Bitcoin and taxes?Bitcoin  is not a fiat currency with legal tender status in any jurisdiction,  but often tax liability accrues regardless of the medium used. There is a  wide variety of legislation in many different jurisdictions which could  cause income, sales, payroll, capital gains, or some other form of tax  liability to arise with Bitcoin.What about Bitcoin and consumer protection?Bitcoin  is freeing people to transact on their own terms. Each user can send  and receive payments in a similar way to cash but they can also take  part in more complex contracts. Multiple signatures allow a transaction  to be accepted by the network only if a certain number of a defined  group of persons agree to sign the transaction. This allows innovative  dispute mediation services to be developed in the future. Such services  could allow a third party to approve or reject a transaction in case of  disagreement between the other parties without having control on their  money. As opposed to cash and other payment methods, Bitcoin always  leaves a public proof that a transaction did take place, which can  potentially be used in a recourse against businesses with fraudulent  practices.It is also worth noting that while merchants usually  depend on their public reputation to remain in business and pay their  employees, they don’t have access to the same level of information when  dealing with new consumers. The way Bitcoin works allows both  individuals and businesses to be protected against fraudulent  chargebacks while giving the choice to the consumer to ask for more  protection when they are not willing to trust a particular merchant.How are bitcoins created?New  bitcoins are generated by a competitive and decentralized process  called "mining". This process involves that individuals are rewarded by  the network for their services. Bitcoin miners are processing  transactions and securing the network using specialized hardware and are  collecting new bitcoins in exchange.The Bitcoin protocol is  designed in such a way that new bitcoins are created at a fixed rate.  This makes Bitcoin mining a very competitive business. When more miners  join the network, it becomes increasingly difficult to make a profit and  miners must seek efficiency to cut their operating costs. No central  authority or developer has any power to control or manipulate the system  to increase their profits. Every Bitcoin node in the world will reject  anything that does not comply with the rules it expects the system to  follow.Bitcoins are created at a decreasing and predictable rate.  The number of new bitcoins created each year is automatically halved  over time until bitcoin issuance halts completely with a total of 21  million bitcoins in existence. At this point, Bitcoin miners will  probably be supported exclusively by numerous small transaction fees.Why do bitcoins have value?Bitcoins  have value because they are useful as a form of money. Bitcoin has the  characteristics of money (durability, portability, fungibility,  scarcity, divisibility, and recognizability) based on the properties of  mathematics rather than relying on physical properties (like gold and  silver) or trust in central authorities (like fiat currencies). In  short, Bitcoin is backed by mathematics. With these attributes, all that  is required for a form of money to hold value is trust and adoption. In  the case of Bitcoin, this can be measured by its growing base of users,  merchants, and startups. As with all currency, bitcoin’s value comes  only and directly from people willing to accept them as payment.What determines bitcoin’s price?The  price of a bitcoin is determined by supply and demand. When demand for  bitcoins increases, the price increases, and when demand falls, the  price falls. There is only a limited number of bitcoins in circulation  and new bitcoins are created at a predictable and decreasing rate, which  means that demand must follow this level of inflation to keep the price  stable. Because Bitcoin is still a relatively small market compared to  what it could be, it doesn’t take significant amounts of money to move  the market price up or down, and thus the price of a bitcoin is still  very volatile.Can bitcoins become worthless?Yes.  History is littered with currencies that failed and are no longer used,  such as the German Mark during the Weimar Republic and, more recently,  the Zimbabwean dollar. Although previous currency failures were  typically due to hyperinflation of a kind that Bitcoin makes impossible,  there is always potential for technical failures, competing currencies,  political issues and so on. As a basic rule of thumb, no currency  should be considered absolutely safe from failures or hard times.  Bitcoin has proven reliable for years since its inception and there is a  lot of potential for Bitcoin to continue to grow. However, no one is in  a position to predict what the future will be for Bitcoin.Is Bitcoin a bubble?A  fast rise in price does not constitute a bubble. An artificial  over-valuation that will lead to a sudden downward correction  constitutes a bubble. Choices based on individual human action by  hundreds of thousands of market participants is the cause for bitcoin’s  price to fluctuate as the market seeks price discovery. Reasons for  changes in sentiment may include a loss of confidence in Bitcoin, a  large difference between value and price not based on the fundamentals  of the Bitcoin economy, increased press coverage stimulating speculative  demand, fear of uncertainty, and old-fashioned irrational exuberance  and greed.Is Bitcoin a Ponzi scheme?A  Ponzi scheme is a fraudulent investment operation that pays returns to  its investors from their own money, or the money paid by subsequent  investors, instead of from profit earned by the individuals running the  business. Ponzi schemes are designed to collapse at the expense of the  last investors when there is not enough new participants.Bitcoin  is a free software project with no central authority. Consequently, no  one is in a position to make fraudulent representations about investment  returns. Like other major currencies such as gold, United States  dollar, euro, yen, etc. there is no guaranteed purchasing power and the  exchange rate floats freely. This leads to volatility where owners of  bitcoins can unpredictably make or lose money. Beyond speculation,  Bitcoin is also a payment system with useful and competitive attributes  that are being used by thousands of users and businesses.Doesn’t Bitcoin unfairly benefit early adopters?Some  early adopters have large numbers of bitcoins because they took risks  and invested time and resources in an unproven technology that was  hardly used by anyone and that was much harder to secure properly. Many  early adopters spent large numbers of bitcoins quite a few times before  they became valuable or bought only small amounts and didn’t make huge  gains. There is no guarantee that the price of a bitcoin will increase  or drop. This is very similar to investing in an early startup that can  either gain value through its usefulness and popularity, or just never  break through. Bitcoin is still in its infancy, and it has been designed  with a very long-term view; it is hard to imagine how it could be less  biased towards early adopters, and today’s users may or may not be the  early adopters of tomorrow.Won’t the finite amount of bitcoins be a limitation?Bitcoin  is unique in that only 21 million bitcoins will ever be created.  However, this will never be a limitation because transactions can be  denominated in smaller sub-units of a bitcoin, such as bits - there are  1,000,000 bits in 1 bitcoin. Bitcoins can be divided up to 8 decimal  places (0.000 000 01) and potentially even smaller units if that is ever  required in the future as the average transaction size decreases.Won’t Bitcoin fall in a deflationary spiral?The  deflationary spiral theory says that if prices are expected to fall,  people will move purchases into the future in order to benefit from the  lower prices. That fall in demand will in turn cause merchants to lower  their prices to try and stimulate demand, making the problem worse and  leading to an economic depression.Although this theory is a  popular way to justify inflation amongst central bankers, it does not  appear to always hold true and is considered controversial amongst  economists. Consumer electronics is one example of a market where prices  constantly fall but which is not in depression. Similarly, the value of  bitcoins has risen over time and yet the size of the Bitcoin economy  has also grown dramatically along with it. Because both the value of the  currency and the size of its economy started at zero in 2009, Bitcoin  is a counterexample to the theory showing that it must sometimes be  wrong.Notwithstanding this, Bitcoin is not designed to be a  deflationary currency. It is more accurate to say Bitcoin is intended to  inflate in its early years, and become stable in its later years. The  only time the quantity of bitcoins in circulation will drop is if people  carelessly lose their wallets by failing to make backups. With a stable  monetary base and a stable economy, the value of the currency should  remain the same.Isn’t speculation and volatility a problem for Bitcoin?This  is a chicken and egg situation. For bitcoin’s price to stabilize, a  large scale economy needs to develop with more businesses and users. For  a large scale economy to develop, businesses and users will seek for  price stability.Fortunately, volatility does not affect the main  benefits of Bitcoin as a payment system to transfer money from point A  to point B. It is possible for businesses to convert bitcoin payments to  their local currency instantly, allowing them to profit from the  advantages of Bitcoin without being subjected to price fluctuations.  Since Bitcoin offers many useful and unique features and properties,  many users choose to use Bitcoin. With such solutions and incentives, it  is possible that Bitcoin will mature and develop to a degree where  price volatility will become limited.What if someone bought up all the existing bitcoins?Only  a fraction of bitcoins issued to date are found on the exchange markets  for sale. Bitcoin markets are competitive, meaning the price of a  bitcoin will rise or fall depending on supply and demand. Additionally,  new bitcoins will continue to be issued for decades to come. Therefore  even the most determined buyer could not buy all the bitcoins in  existence. This situation isn’t to suggest, however, that the markets  aren’t vulnerable to price manipulation; it still doesn’t take  significant amounts of money to move the market price up or down, and  thus Bitcoin remains a volatile asset thus far.What if someone creates a better digital currency?That  can happen. For now, Bitcoin remains by far the most popular  decentralized virtual currency, but there can be no guarantee that it  will retain that position. There is already a set of alternative  currencies inspired by Bitcoin. It is however probably correct to assume  that significant improvements would be required for a new currency to  overtake Bitcoin in terms of established market, even though this  remains unpredictable. Bitcoin could also conceivably adopt improvements  of a competing currency so long as it doesn’t change fundamental parts  of the protocol.What is Bitcoin mining?Mining  is the process of spending computing power to process transactions,  secure the network, and keep everyone in the system synchronized  together. It can be perceived like the Bitcoin data center except that  it has been designed to be fully decentralized with miners operating in  all countries and no individual having control over the network. This  process is referred to as "mining" as an analogy to gold mining because  it is also a temporary mechanism used to issue new bitcoins. Unlike gold  mining, however, Bitcoin mining provides a reward in exchange for  useful services required to operate a secure payment network. Mining  will still be required after the last bitcoin is issued.How does Bitcoin mining work?Anybody  can become a Bitcoin miner by running software with specialized  hardware. Mining software listens for transactions broadcast through the  peer-to-peer network and performs appropriate tasks to process and  confirm these transactions. Bitcoin miners perform this work because  they can earn transaction fees paid by users for faster transaction  processing, and newly created bitcoins issued into existence according  to a fixed formula.For new transactions to be confirmed, they  need to be included in a block along with a mathematical proof of work.  Such proofs are very hard to generate because there is no way to create  them other than by trying billions of calculations per second. This  requires miners to perform these calculations before their blocks are  accepted by the network and before they are rewarded. As more people  start to mine, the difficulty of finding valid blocks is automatically  increased by the network to ensure that the average time to find a block  remains equal to 10 minutes. As a result, mining is a very competitive  business where no individual miner can control what is included in the  block chain.The proof of work is also designed to depend on the  previous block to force a chronological order in the block chain. This  makes it exponentially difficult to reverse previous transactions  because this requires the recalculation of the proofs of work of all the  subsequent blocks. When two blocks are found at the same time, miners  work on the first block they receive and switch to the longest chain of  blocks as soon as the next block is found. This allows mining to secure  and maintain a global consensus based on processing power.Bitcoin  miners are neither able to cheat by increasing their own reward nor  process fraudulent transactions that could corrupt the Bitcoin network  because all Bitcoin nodes would reject any block that contains invalid  data as per the rules of the Bitcoin protocol. Consequently, the network  remains secure even if not all Bitcoin miners can be trusted.Isn’t Bitcoin mining a waste of energy?Spending  energy to secure and operate a payment system is hardly a waste. Like  any other payment service, the use of Bitcoin entails processing costs.  Services necessary for the operation of currently widespread monetary  systems, such as banks, credit cards, and armored vehicles, also use a  lot of energy. Although unlike Bitcoin, their total energy consumption  is not transparent and cannot be as easily measured.Bitcoin  mining has been designed to become more optimized over time with  specialized hardware consuming less energy, and the operating costs of  mining should continue to be proportional to demand. When Bitcoin mining  becomes too competitive and less profitable, some miners choose to stop  their activities. Furthermore, all energy expended mining is eventually  transformed into heat, and the most profitable miners will be those who  have put this heat to good use. An optimally efficient mining network  is one that isn’t actually consuming any extra energy. While this is an  ideal, the economics of mining are such that miners individually strive  toward it.How does mining help secure Bitcoin?Mining  creates the equivalent of a competitive lottery that makes it very  difficult for anyone to consecutively add new blocks of transactions  into the block chain. This protects the neutrality of the network by  preventing any individual from gaining the power to block certain  transactions. This also prevents any individual from replacing parts of  the block chain to roll back their own spends, which could be used to  defraud other users. Mining makes it exponentially more difficult to  reverse a past transaction by requiring the rewriting of all blocks  following this transaction.What do I need to start mining?In  the early days of Bitcoin, anyone could find a new block using their  computer’s CPU. As more and more people started mining, the difficulty  of finding new blocks increased greatly to the point where the only  cost-effective method of mining today is using specialized hardware. You  can visit BitcoinMining.com for more information.Is Bitcoin secure?The  Bitcoin technology - the protocol and the cryptography - has a strong  security track record, and the Bitcoin network is probably the biggest  distributed computing project in the world. Bitcoin’s most common  vulnerability is in user error. Bitcoin wallet files that store the  necessary private keys can be accidentally deleted, lost or stolen. This  is pretty similar to physical cash stored in a digital form.  Fortunately, users can employ sound security practices to protect their  money or use service providers that offer good levels of security and  insurance against theft or loss.Hasn’t Bitcoin been hacked in the past?The  rules of the protocol and the cryptography used for Bitcoin are still  working years after its inception, which is a good indication that the  concept is well designed. However, security flaws have been found and  fixed over time in various software implementations. Like any other form  of software, the security of Bitcoin software depends on the speed with  which problems are found and fixed. The more such issues are  discovered, the more Bitcoin is gaining maturity.There are often  misconceptions about thefts and security breaches that happened on  diverse exchanges and businesses. Although these events are unfortunate,  none of them involve Bitcoin itself being hacked, nor imply inherent  flaws in Bitcoin; just like a bank robbery doesn’t mean that the dollar  is compromised. However, it is accurate to say that a complete set of  good practices and intuitive security solutions is needed to give users  better protection of their money, and to reduce the general risk of  theft and loss. Over the course of the last few years, such security  features have quickly developed, such as wallet encryption, offline  wallets, hardware wallets, and multi-signature transactions.Could users collude against Bitcoin?It  is not possible to change the Bitcoin protocol that easily. Any Bitcoin  client that doesn’t comply with the same rules cannot enforce their own  rules on other users. As per the current specification, double spending  is not possible on the same block chain, and neither is spending  bitcoins without a valid signature. Therefore, It is not possible to  generate uncontrolled amounts of bitcoins out of thin air, spend other  users’ funds, corrupt the network, or anything similar.However,  powerful miners could arbitrarily choose to block or reverse recent  transactions. A majority of users can also put pressure for some changes  to be adopted. Because Bitcoin only works correctly with a complete  consensus between all users, changing the protocol can be very difficult  and requires an overwhelming majority of users to adopt the changes in  such a way that remaining users have nearly no choice but to follow. As a  general rule, it is hard to imagine why any Bitcoin user would choose  to adopt any change that could compromise their own money.Is Bitcoin vulnerable to quantum computing?Yes,  most systems relying on cryptography in general are, including  traditional banking systems. However, quantum computers don’t yet exist  and probably won’t for a while. In the event that quantum computing  could be an imminent threat to Bitcoin, the protocol could be upgraded  to use post-quantum algorithms. Given the importance that this update  would have, it can be safely expected that it would be highly reviewed  by developers and adopted by all Bitcoin users.What if I have more questions about Bitcoin?Three great places where you can get your questions answered are the BitcoinTalk Forum at BitcoinTalk.org, the Bitcoin sub-reddit at Reddit.com/r/bitcoin and Bitcoin Stack Exchange at Bitcoin.StackExchange.com.