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Message: <blockquote data-quote="Random Bystander" data-source="post: 7706485" data-attributes="member: 6702095">I can provide a summary; but I will have to start with a Wikipedia link on Cryptography: [<a href="https://en.wikipedia.org/wiki/Cryptography" target="_blank">Link</a>] Note: I am neither an Accountant, Cryptographer, nor Lawyer.The basic idea of Bitcoin, and related ideas, is that the transaction (amount, sender, receiver, related details) is heavily encrypted, said encryption method being regularly updated. The encryption is done using a public-private key system, to my recall. To gain bitcoin, money is sent to a seller, who sends back an encrypted package. That encrypted package uses the public-private key exchange in a manner I am not conversant with; the end result being that the final package is encrypted using your private key. This is done using bitcoin-specific software. Packages are re-encrypted using the latest method whenever a package is sent.At some point, when you wish to pay someone using bitcoin, you would start your bitcoin software, portion the correct amount of bitcoins from your electronic wallet, and they would be encrypted and sent appropriately - Or hopefully so.Bitcoin mining is the process of calculating cryptographic keys using the official bitcoin mining software. Said software had, at the time of its release, an artificial limit imposed to slow it down such that mining could proceed for years. A bounty of bitcoin was set for each mined key, such that, when all keys were mined, a fixed and definite amount of bitcoin would have been released. This bounty would halve at fixed intervals.From there, the purchase and sale of bitcoin follows the laws of economics, as well as whatever local laws may be imposed.Overall, aside from being entirely artificial, and implemented in software, it is a financial unit not dissimilar to gold, including much of its value being derived from the "sparkly factor".Edit: I had typed "Bitcoin mining is the process of factoring cryptographic keys", but the meaning was likely incorrect, and the sentence fragment was changed to "Bitcoin mining is the process of calculating cryptographic keys"</blockquote>

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