Thursday, 12 May 2016 04:35

Bitcoin/ Blockchain Tech Explained: A Few More Questions Answered

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1. How is it different from other currencies?

It can be used to buy things electronically and just like Kenyan Shillings, South African Rand or the US dollar can be traded online. Bitcoins are however regulated in a decentralized system with no specific institution in charge which makes people at ease because it means no large banks are in charge of their money.

2. Who created it?

A software developer called Satoshi Nakamoto proposed Bitcoin which was an electronic payment system backed not by the gold standard or the dollar but by open source mathematical formulas that enabled instant transfers with very low transaction fees.

3. Who prints it?

No one. The currency isn't printed by some shadowy bankers intent of paying off national debt effectively devaluing their currency and causing economic crises. It is instead created digitally by a community of people that anyone can join who 'mine' it using computation power when they process transactions made virtually in the system. Basically, bitcoin are only generated to pay the people who diligently watch the blockchain and verify transactions.

4. How many coins exist today?

The bitcoin protocol - the rules that make it work, say that only 21 million bicoins can ever be created by miners. These coins can however be divided into smaller parts with a Satoshi (named after the founder) being the smallest available at one hundredth of a bitcoin - like one cent to a shilling.  



Read 483 times Last modified on Thursday, 26 May 2016 05:37

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