The Bitcoin Byte

The Bitcoin Byte is a sociotechnical research project by graduate students at Georgetown University. We cover what Bitcoin is, how it works, and why it matters to you.

Here’s a byte (8 bits) of information to get you started:

Bitcoin is a cryptocurrency: a decentralized, digital payment system that functions like cash, made up of alphanumeric codes and protected by encryption.

It’s not the only one! There are lots of digital payment systems, but it’s definitely the most prominent one right now.

You can acquire Bitcoins by engaging your computer power to verify Bitcoin transactions, purchasing them from a specialized currency exchange, or accepting them as payment.

Verifying Bitcoin transactions is called “mining“: a specialized software computes thousands of equations to read and re-encrypt those alphanumeric codes. People who use their computers to do this are paid in new Bitcoins.

All Bitcoin transactions are listed in the block chain (a sort of public ledger). This all but eliminates fraud as transactions must be approved by Bitcoin users, and too much computational power would be required to undo or rewrite any past transactions.

Governments are still unsure about how to regulate Bitcoin use (or if they should at all), but the IRS defines it as property – not currency. Iceland has banned it.

It’s true: a few people have become very rich from investing in Bitcoin. And a few more have lost quite a lot of money.

Bitcoin and the technology behind cryptocurrency are part of larger social shifts toward decentralization, globalization, and data privacy.

Got the facts down? Find some in-depth analysis on our blog → 

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