Q. What is Bitcoin?
A. Bitcoin is a peer-to-peer currency. Peer-to-peer means that no
central authority issues new money or tracks transactions. These tasks
are managed collectively by the network.
Q. How does Bitcoin work?
A. Bitcoin uses public-key cryptography, peer-to-peer networking, and
proof-of-work to process and verify payments. Bitcoins are sent (or
signed over) from one address to another with each user potentially
having many, many addresses. Each payment transaction is broadcast to
the network and included in the blockchain so that the included bitcoins
cannot be spent twice. After an hour or two, each transaction is locked
in time by the massive amount of processing power that continues to
extend the blockchain. Using these techniques, Bitcoin provides a fast
and extremely reliable payment network that anyone can use. -- From the Bitcoin Wiki FAQ
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