What is Bitcoin?
Bitcoin is a consensual network that enables a new payment system and a completely digital currency. It is the first decentralized payment peer-to-peer network powered by its users without a central authority or intermediaries. From a user point of view, Bitcoin is like money for the Internet. Bitcoin may be the only triple ledger system in existence.
Who Created Bitcoin?
Bitcoin is the first implementation of a concept known as "crypto currency", which was first described in 1998 by Wei Dai on the "cypherpunks" e-mail list, where he proposed the idea of a new type of money that would use the cryptography to control its creation and transactions, rather than being done by a centralized authority. The first Bitcoin protocol specification and proof of concept was published by Satoshi Nakamoto in 2009 on an email list. Satoshi left the project in late 2010 without revealing much about himself. Since then, the community has grown exponentially and has numerous developers working on the Bitcoin protocol.
Satoshi's anonymity has at times raised unwarranted suspicions, many of them caused by a lack of understanding about the open source on which Bitcoin is based. The Bitcoin protocol and its software are openly published and any programmer anywhere in the world can review it or create their own modified version of the software. Like current programmers, Satoshi's influence has been limited to the changes he made being adopted by others, and therefore he did not control Bitcoin. Thus, knowing the identity of the inventor of Bitcoin is just as relevant as knowing who invented the paper.
Who controls the Bitcoin network?
In the same way that no one controls the technology behind email, Bitcoin has no owners either. Bitcoin is controlled by all Bitcoin users in the world. Although the programmers improve the software, they cannot force a change in the Bitcoin protocol because all other users are free to choose the software and version they want. To remain compatible with each other, all users need to use software that complies with the same rules. Bitcoin can only work properly if there is consensus among all users. Therefore, all users and programmers have a great incentive to protect this consensus.
How does Bitcoin work?
From the user's perspective, Bitcoin is nothing more than a mobile or desktop application that provides a personal Bitcoin wallet and allows the user to send and receive bitcoins with it. This is how Bitcoin works for most users.
Behind the scenes, the Bitcoin network shares a public ledger called a "block chain." This accounting contains each transaction processed, allowing 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 when sending Bitcoins from their Bitcoin addresses. Furthermore, anyone can process a transaction using the computational power of specialized hardware and get a reward in Bitcoins for this service. This is commonly called "mining" or mining. To learn more about Bitcoin, you can consult the dedicated page and the original document.
Do people really use it?
Yes. There are a growing number of businesses and individuals using Bitcoin. This includes traditional businesses like restaurants, houses, law firms, and popular internet services like Namecheap, Wordpress, Reddit, and Flattr. Although Bitcoin is still a relatively new phenomenon, it is growing fast. At the end of August 2013, the value of all bitcoins in circulation exceeded 1.5 trillion dollars and every day the equivalent of millions of dollars in bitcoins were exchanged.
How are bitcoins acquired?
As payment for goods or services.
Buy bitcoins at a Bitcoin exchange.
Trade bitcoins with someone in your area.
Get bitcoins through competitive mining.
While it is possible to find individuals who want to sell bitcoins in exchange for a payment by PayPal or credit card, most exchange houses do not allow these payment methods to be used. This is due to cases where someone buys bitcoins with PayPal and then reverses half of the transaction. This is commonly referred to as a refund.