You Ask, We Answer: What is Bitcoin and how does it work?

You Ask, We Answer

Bitcoin is the original and most popular type of cryptocurrency

NORTHWEST ARKANSAS (KNWA/KFTA) – Several of you are asking us about Bitcoin this week.

Josh Cox, the founder of the Northwest Arkansas Blockchain Society, said cryptocurrency is a form of digital decentralized money. Meaning, it’s stored, created and processed outside of a central bank or government. Unlike traditional hard or paper money, it has no physical form.

Bitcoin is the original and most popular type of cryptocurrency, according to Cox.

“There are a lot of people who are experimenting with it, because they see it as a future value,” he said. “They see the value of digital currency. All around the world there are people only living on cryptocurrency. That just shows the platform is growing and there are people out there who are willing to make those changes and adopt future technology.”

Cox said Bitcoin maintains its own record keeping through the use of blockchain. Blockchains create digital records of transactions. The transaction log is far more secure than paper records or bank accounts which could be hacked.

Cox explained how a transaction works, “You have what is called a digital wallet on your phone. You can show it to anyone as long as you prove the transaction can go through. If they’re willing to accept it or able to accept it is the main question. I think the same way we transact with Venmo or PayPal, I think that’s going to be the future of Bitcoin. It’s very simple to use as long as the technology is there to receive it.”

Cox said if you’re looking to purchase Bitcoin, Coinbase is a great company to go through because it’s in compliance with the IRS.

“Coinbase is a well known company in the U.S.,” he said. “They are in compliance with the IRS, so they are not being shady with any of their dealings. Just like you trade stocks, it’s as simple as that. You download the application, you upload fiat currency, and then you trade it for whichever company you’d like to buy into.”

If you want to learn more about Bitcoin and how it works, you can contact Cox at nwablockchain@gmail.com.

If there is something in your community that you want to know more about, we want to look into it. You can send your questions to news@KNWA.com.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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