Bitcoins are a digital currency created in 2001 by Satoshi Nakamoto. It is based on open source software and P2P networks with no central authority or issuers. The coins are saved on your computer within a wallet file or in an unauthorised wallet. They can be exchanged between anyone with a Bitcoins address. The database of transactions is spread across a peer to peer network. They also use digital signatures to ensure however only spent once and by the owner who owns them.
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