The basic idea behind bitcoins is a form of virtual currency. The people who develop this technology to treat it as though it is just another form of currency. In other words, they make the transaction easy for the user so that he can perform a transaction with ease. This is the very basis of the transactions made via the internet in much the same way as you would use a credit card for shopping on the internet.
There is no centralised authority or body that supervises transactions. Transactions are carried out at the point of the buyer and the seller. The buyer gives his credit card details and the seller's details. The buyer can use this data to make a payment at any time or just wait for the agreed upon time. The seller has no choice but to match the payment if he wants to close the deal.
In the initial days, bitcoins was viewed as something of a foreign currency. This meant that those people who developed this system had to be located in a foreign country. They had to have some kind of expertise in foreign exchange, or at least be able to transfer large sums of money abroad. Today, however, bitcoins is no longer a problem due to the development of various online systems that allow users from anywhere to transact.
The most popular form of transaction is through an online exchange. An online exchange is simply a website where people can trade between each other. Transactions are usually done through transfers of funds and sometimes by buying and selling items. No more than two buyers and sellers should be registered on any website.
Other ways of using and exchanging bitcoins are through what is known as "minting". This is when someone creates new coins out of thin air. Usually this happens when the value of the existing coins becomes low and people need an alternative. This is done by creating coins out of nothing and then having them registered in a unique manner so that when they want to spend them they have to show proof of ownership.
Another way of getting bitcoins is to receive them by spending other people's coins. This is usually done by purchasing goods on an online merchant who accepts payments in this manner. In this case the owner of the goods will give their client permission to spend their coins. Then after the transaction has been completed, the merchant will return the change back to the owner. The advantage of this type of transaction is that there are no ties between the parties.
One final way to get bitcoins is through mining. This is where people search for a specific kind of computer that has a certain software program that is used to "mine" a certain amount of bitcoins each time a user wants to add a coin to their system. It is called "miner mining" because instead of the owner of the coins having to find a solution to the puzzle, they just have to wait for the software to be programmed into the computer. Sometimes a system can be programmed into the computer without actually requiring the owner to do anything. These are the three main types of bitcoins and how they work.
