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FREQUENTLY ASKED QUESTIONS

Bitcoin FAQ

WHAT IS BITCOIN?

Bitcoin is a form of cryptocurrency which is not owned, controlled or managed by any of the government, kings or any powerful organisation. Bitcoin is not printed in banks and is not produced against gold. It is the most popular decentralized digital currency which is now used worldwide as a medium of exchange.

WHAT IS CRYPTO CURRENCY?

A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

A cryptocurrency is a medium of exchange like normal currencies such as USD, but designed for the purpose of exchanging digital information through a process made possible by certain principles of cryptography. Cryptography is used to secure the transactions and to control the creation of new coins.

WHAT IS MINNING?

Mining is the processing of transactions in the digital currency system, in which the records of current transactions, known as a blocks, are added to the record of past transactions, known as the Blockchain.

cryptocurrency mining is a process in which cryptocurrency is produced by solving complex mathematical problems. Mining is the process by which transactions are verified and added to the public ledger, known as the blockchain. It is a means through which new Crypto coins are released. Miners are the rewarded with Block Rewards in respective cryptocurrency as a compensation towards their contribution.

Anyone with precise hardware, Appropriate resources & domain knowledge can participate in mining. At BTC Minetech, we save all the trouble and provide a ready to mint (Make crypto-currency),cloud mining platform for you.

WHERE ARE YOUR MINING SETUPS?

We have established our rigs in China where electricity rates were low and generating green electricity was also cheaper (through solar plants) than any other part of the globe. However, we can not reveal actual location of it to avoid any uninvited trouble.

WHICH HARDWARE YOU ARE USING TO MINE?

We use Application-specific integrated circuit chips (ASICs) hardware for Bitcoin mining which are solely created to solve Bitcoin blocks. They have only minimal requirements for other normal computer applications. Consequently, ASIC Bitcoin mining systems can solve Bitcoin blocks much quicker and use less electricity or power than older Bitcoin mining hardware like CPUs, GPUs or FPGAs. There are being supplied by the biggest hardware vendor in this domain, BitMain.

WHAT ARE THE ADVANTAGES OF BITCOINS?

Payment freedom - It is possible to send and receive Bitcoins anywhere in the world at any time. No bank holidays. No borders. No bureaucracy. Bitcoin allows its users to be in full control of their money.

Choose your own fees - There is no fee to receive Bitcoins, and many wallets let you control how large a fee to pay when spending. Higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred, so it's possible to send 100,000 Bitcoins for the same fee it costs to send 1 Bitcoin.

Fewer risks for merchants - Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance.

Security and control - Bitcoin users are in full control of their transactions. It is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods.

Transparent and neutral - All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure.

WHY DO PEOPLE TRUST BITCOIN?

Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and Bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.

WHAT IF I RECEIVE A BITCOIN WHEN MY COMPUTER IS POWERED OFF?

This works fine. The bitcoins will appear next time you start your wallet application. Bitcoins are not actually received by the software on your computer, they are appended to a public ledger that is shared between all the devices on the network. If you are sent bitcoins when your wallet client program is not running and you later launch it, it will download blocks and catch up with any transactions it did not already know about, and the bitcoins will eventually appear as if they were just received in real time. Your wallet is only needed when you wish to spend bitcoins.

HOW DIFFICULT IS IT TO MAKE A BITCOIN PAYMENT?

Bitcoin payments are easier to make than debit or credit card purchases, and can be received without a merchant account. Payments are made from a wallet application, either on your computer or smartphone, by entering the recipient's address, the payment amount, and pressing send. To make it easier to enter a recipient's address, many wallets can obtain the address by scanning a QR code or touching two phones together with NFC technology.

WHY DO PEOPLE TRUST BITCOIN?

Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.

What HAPPENS WHEN BITCOINS ARE LOST?

When a user loses his wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.

Is Bitcoin legal?

To the best of our knowledge, Bitcoin has not been made illegal by legislation in most jurisdictions. However, some jurisdictions (such as Argentina and Russia) severely restrict or ban foreign currencies. Other jurisdictions (such as Thailand) may limit the licensing of certain entities such as Bitcoin exchanges. Regulators from various jurisdictions are taking steps to provide individuals and businesses with rules on how to integrate this new technology with the formal, regulated financial system. For example, the Financial Crimes Enforcement Network (FinCEN), a bureau in the United States Treasury Department, issued non-binding guidance on how it characterizes certain activities involving virtual currencies.

Is Bitcoin useful for illegal activities?

Bitcoin is money, and money has always been used both for legal and illegal purposes. Cash, credit cards and current banking systems widely surpass Bitcoin in terms of their use to finance crime. Bitcoin can bring significant innovation in payment systems and the benefits of such innovation are often considered to be far beyond their potential drawbacks.

What about Bitcoin and taxes?

Bitcoin is not a fiat currency with legal tender status in any jurisdiction, but often tax liability accrues regardless of the medium used. There is a wide variety of legislation in many different jurisdictions which could cause income, sales, payroll, capital gains, or some other form of tax liability to arise with Bitcoin.

What about Bitcoin and consumer protection?

Bitcoin is freeing people to transact on their own terms. Each user can send and receive payments in a similar way to cash but they can also take part in more complex contracts. Multiple signatures allow a transaction to be accepted by the network only if a certain number of a defined group of persons agree to sign the transaction. This allows innovative dispute mediation services to be developed in the future. Such services could allow a third party to approve or reject a transaction in case of disagreement between the other parties without having control on their money. As opposed to cash and other payment methods, Bitcoin always leaves a public proof that a transaction did take place, which can potentially be used in a recourse against businesses with fraudulent practices.

How are bitcoins created?

New bitcoins are generated by a competitive and decentralized process called "mining". This process involves that individuals are rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange.