Q: With all the recent news about bitcoin, can you please explain in layman’s terms exactly how you buy it and how you spend it?
—Marcia Sasser, Marietta
A: Bitcoin is a cryptocurrency created by a figure using the pseudonym Satoshi Nakamoto. Dictionary.com defines it as "a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank."
To buy bitcoin, several services exist but bitcoin’s site (bitcoin.org) links to several exchanges where you trade national currency for coins.
When you send money to someone else, the transaction is recorded in every bitcoin trader’s ledger, called the blockchain, a “technology is not unique to bitcoin, but a more general technology useful for verifying many sorts of electronic transactions and agreements,” William Lastrapes, an economics professor at the University of Georgia’s Terry College of Business, told Q&A on the News via email.
The process requires you to enter the address of a person or business’s wallet, much like a bank account, according to upfolio.com. To authorize transactions, you use a password called a private key, which is similar to a digital signature to access your wallet.
Bitcoins can work as currency without a third party for trading because of its ability to block double spending, or trying to use the bitcoin for more than one transaction. Bitcoin solves the counterfeit problem by making a public ledger of transactions so that a scam would be obvious to everyone, according to Upfolio.
Fast Copy News Service wrote this column; Maggie Scruggs contributed. Do you have a question? We’ll try to get the answer. Call 404-222-2002 or email q&a@ajc.com (include name, phone and city).
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