Who created Bitcoin?
Bitcoin was invented by anonymous user ‘Satoshi Nakamoto’, who published his invention in 2008, and released as open-source software in 2009.
Satoshi Nakamoto proposed bitcoin as an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees
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 prints or creates bitcoin?
No one. This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. Those banks can simply produce more money to cover the national debt, thus devaluing their currency
Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are ‘mined’, using computing power in a distributed network. This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network.
The Bitcoin protocol – the rules that make bitcoin work – say that only 21 million bitcoins can ever be created by miners. This will be reached in 2024.
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.
What makes it different from regular currencies?
Bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money.
What is bitcoin based on?
Conventional currency has been based on gold or silver. Theoretically, you knew that if you handed over a dollar at the bank, you could get some gold back (although this didn’t actually work in practice). But bitcoin isn’t based on gold; it’s based on mathematics.
Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical formula is freely available, so that anyone can check it. The software is also open source, meaning that anyone can look at it to make sure that it does what it supposed to do.
How do most people make money with Bitcoin?
Trade: Buy low and sell high
Mining: This is the most favorable as there is big money in Mining Bitcoins
What are the challenges of Bitcoin mining?
Bitcoin Mining is very capital intense and to be competitive in you have to own huge warehouses with loads of servers. The average man on the street is unable to participate in the production of the mining and therefore have to stick to trading Bitcoins. They then turn to Cloud Mining.
What are the biggest risks of cloud mining?
- Don’t know the owners of the Bitcoin mine.
- Security (hacking is a huge problem)
- Too small
- Unscrupulous companies
These companies have opened up their cloud mining interface book for us to mine in when as a matter of fact we are helping them fund the running of their servers and helping them pay electricity and other expenses. This is where the smaller companies fall away because of the huge capital outlay. They offer fantastic returns but you stand a chance of losing your money.
How do I purchase Bitcoins?
Note, the links below to Luno are affiliate links. If you buy Bitcoin using one of these links to go to Luno, both you and us will receive a bonus R25 of bitcoin. ONce you are signed up, you will also receive an exclusive link to invote your friends! When you click on them, you will be redirected to an affiliate link belonging to one of the Bitcoin Mining Club members.
In South Africa, we like to use a service called, Luno. Luno us a very safe and secure way for South Africans to easily buy Bitcoin.
So what you need to do is, go to, Luno, and register for a free account.
You will then be guided through a verification process. This might seem a bit long and frustrating at first, but keep in mind, Luno is very secure and this is all for your protection.
See your Luno account as a bank account for which you need to get FICA’d.
Once you have gone through the verification process, you are able to transfer money directly from your bank account to your Luno account.
When you have funds in your Luno account, you are able to purchase Bitcoin.
*Pro tip, use the Luno app on your phone, it is much simpler to use than the website.
If you are purchasing Bitcoins to pay for your mining contract, you need to work out the exact amount of Bitcoins you need to purchase. We explain that in the next Frequently Asked Question below, How do I buy a Bitcoin mining contract?
