BITCOIN EXPLAINED IN A SIMPLE WAY:

Bitcoin is a currency that has no physical manifestation and exists only on the world's internet (a.k.a. the 'cash of the internet').

An important attribute that makes this currency attractive and thought after is that it is not controlled by any kind of bank of central authority. For all intents and purposes , it is a decentralized peer-to-peer payment network, not requiring any central servers to process transactions.

A public ledger called 'blockchain' permanently records all transactions and it is verified by 'miners' and 'nodes' to make sure the network remains secure and who process those transactions.

In turn, the miners are rewarded, in bitcoins, thus resulting in the creation of even more bitcoins. Because the reward is halved every 210,000 blocks (about four years), the maximum number of bitcoins that will ever exist is 21 million.

Groups of accepted transactions, or blocks, are created (about 6 times per hour, one every 10 minutes), added to the 'blockchain' and thenpublished. In order for a block to be accepted by the network and added to the 'blockchain', miners have to find a number called 'nonce' (by trying different values) which is used to when creating the block's content cryptographic hash.

To start using Bitcoin, you must first get a Wallet. This is a software tool that will store your credentials for accessing your bitcoins and for connecting to the network and make transactions.

There are also online Wallets, which do the same job as a Wallet installed on your computer, however, your credentials are stored by the online Wallet's provider.

The quick way to get some bitcoins is to purchase them using normal currency (via debit or credit card etc.). Once you have your first bitcoins, you can start transitioning.

Of course, another way to get bitcoins is to actually start mining. However, doing this may end up costing you more than you earn because the electricity consumed by your computer in the mining process may amount to more than the reward you get for the blocks you publish.

If you do decide to go ahead and mine bitcoins, consider purchasing a specialized device. Depending on the power efficiency and/or advertised capacity, the price of such a device may differ.