Created in 2009, Bitcoin is an open-source payment network that uses peer-to-peer technology to enable secure, monetary transactions without the involvement of a bank. In other words, you don’t need a credit or debit card or bank account information. Payments can even be made anonymously. Users can make payments by simply entering the recipient’s Bitcoin address and the payment amount, and hitting the “send” button.
Bitcoin uses cryptography software to ensure secure transactions instead of a central authority. It is owned and controlled by users, who are capable of using the software and Bitcoin version of their choosing. Essentially, Bitcoin is a mobile app or computer program that makes it possible for users to install a digital Bitcoin wallet on their computer or mobile device and transact digital currency, or bitcoins.
Many organizations, including restaurants, apartment complexes, and various Internet services, are using Bitcoin to conduct business. Records of all confirmed transactions are stored on the block chain, a shared public ledger that allows users to monitor their accounts and verify transactions.
Bitcoin is a new concept that can be confusing and overwhelming. It’s important to make sure you have a thorough understanding of how Bitcoin works before sending or receiving money for personal or business use. In a future post, we’ll discuss how the IRS classifies Bitcoin and explain why Florida regulators have weighed in on the use of Bitcoin.
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