What is Bitcoin?

Bitcoin is a digital/virtual currency. Like any other currency it can be used for shopping, speculating or just saving money. But in difference to a normal bank account there is no central database where you values are stored rather than a central bank which controls the whole thing.

But how can it work when there is no central control? How is it kept sure that every transfer and also the account balance is correct? This is managed via the so called "blockchain", which is a continuously growing list of records (called blocks), which are linked and secured using cryptography. To connect them each block contains a hash pointer as a link to a previous block, together with a timestamp and transaction data. Postpone modification of the data is blocked by design.

Initally it was nescessary to download the whole blockchain (100GB at the moment) to work with Bitcoin. But with Clients like Electrum (which we use here) this is not longer needed, because it uses servers that index the Bitcoin blockchain. You can start within seconds.