(Sorry that the responses are long. I originally wrote this in a text file and cant find a spoiler tag. If this is a problem, I can summarize the answers.)
Q. What is Bitcoin? Isn't it just made-up money?A: Bitcoin is a digital currency based on cryptography. It is the equivalent of cash, but for the internet.
You can download a bitcoin wallet to generate a bitcoin address and private key, and share the bitcoin address to receive money. Make sure to keep your private key safe and dont give it to anyone (treat it like a password, as anyone with access to your private key can steal your bitcoins).
You can buy and sell bitcoin in centralized exchanges or p2p exchanges like localbitcoins, or you can earn bitcoin, if you sell a product or service.
Right now it is unprofitable to mine bitcoin with a CPU/GPU (although pre-2013 this used to be the main way to earn bitcoins) and mining now requires ASIC hardware and low electricity costs.
Bitcoins price is based on supply and demand. This means if a lot of people want to buy bitcoin, and few people are prepared to sell (hodlers), the price will increase. Bitcoin is also deflationary (less bitcoins are mined per 4 years, and the final bitcoin will be mined in 2140), which means the supply slowly decreases, and with constant or increased demand, the price of 1 bitcoin will rise. Even when all bitcoins are mined, it is still possible to buy, sell and use bitcoin - the only difference would be increased price and tx fees.
You dont need to buy a whole bitcoin. If you cant afford to or dont want to pay $7600 (current price in Aug 1 2018) for 1 bitcoin, you can buy any smaller amount, such as 0.5, 0.0024 or 0.000123 bitcoin.
No government or bank controls bitcoin. It is controled by you, the user. You have full control over your funds, as long as you protect your private key, they cant be seized or stolen. You dont need to provide personal information to use bitcoin, all you need is a bitcoin address and private key. The bitcoin network is run decentrally on hundreds of computers, which means it is difficult to attack. And your payments are stored permanently in the blockchain, which means no one can undo them or claim you didnt pay.
Bitcoin is a new way to pay online and in reality and is potentially safer than Paypal, Venmo and bank transfers. It is open to anyone in the world with an internet connection, and offers quick payments (you generally only need to wait 10 minutes for 1 confirmation, compared to 2-3 days for a bank transfer) and low fees (e.g. for a payment of $1000 you only need to pay $1 fee).
Q: Is Bitcoin a scam? What about a Ponzi scheme?A: Bitcoin isnt a scam or a ponzi scheme, it is a currency. The price can vary due to changes in supply and demand, but this doesnt affect bitcoins use as a currency to buy and sell products and services online and in person.
Ponzi schemes promise unrealistic rewards and rely on new investors to pay the profits of current investors, and in the end exit scam and leave the new investors with nothing.
This is not bitcoin. Bitcoin is in essence a software run by thousands of computers decentrally (and you access this network when you use a web wallet or desktop wallet). It is based on secure cryptography. Bitcoin isnt owned by one person and cant exit scam. Bitcoin will always be available as long as there are full nodes, miners and people who want to use it. And anyone can run a full node on their computer without high expenses or detailed technical knowledge.
Bitcoin is also deflationary, which means less bitcoin is generated per 4 years, which decreases new supply and keeps the price stable or increasing. This shows that bitcoin is planned for the long-term and will be around as long as we - the users - buy, sell, hodl and use bitcoin.
Q: Isn't it too late to get into Bitcoin?A: It is never too late to start using bitcoin. No one can predict the future price of bitcoin, but bitcoin has a lot of potential and with more users (=more demand), it is likely that the price will increase. You dont need to buy 1 whole bitcoin if it is too expensive. You can buy any smaller amount such as 0.5, 0.03, 0.001 btc at any time. The bitcoin community is open and welcomes new users, and people are happy to give help and advice about bitcoin.
Q: Is Bitcoin legal? I heard it's illegal in some countries. Why?A: Bitcoin is a currency, therefore it is irrational to ban it, just as it would be irrational to ban cash or USD. Some countries claim to have banned bitcoin, but even in these countries you can still use bitcoin, download and run bitcoin software, and buy and sell bitcoin peer-to-peer. If the legality of bitcoin concerns you, you can search "is bitcoin legal in [country]" in any search engine.
Q. Don't people use Bitcoin for the black market or for illegal stuff?A: The majority of bitcoin transactions and usage is to buy and sell legal goods and services and to legally trade bitcoin-fiat or bitcoin-altcoins. Bitcoin can be used as one of multiple payment methods in darknet marketplaces, but cash and even traceable bank transfers can be used for illegal purchases. This is not the fault of bitcoin, just as it isnt the fault of banks or cash, when these payment methods are used for illegal purchases. Associations of bitcoin with illegal uses are generally FUD, designed to encourage you to sell your bitcoin cheap, so that FUDers can profit. You wont be accused of crimes, if you use bitcoin, just as you cant be accused of crimes, if you simply carry cash (also anonymous and can be used for illegal purchases) in your wallet.
Q: Why is Bitcoin so expensive? I can't afford a bitcoin.A: Bitcoins price depends on supply and demand, i.e. the price of bitcoin depends on how much people are willing to pay for it.
Because bitcoin is a deflationary currency, you cant simply print more money, if more people want to have it. Generation of new bitcoin requires electricity (=proof of work mining), which means it costs money to make new bitcoin. Additonally the block reward is halved every 4 years, which means miners generate less bitcoin as time goes on.
This means that the supply of bitcoin decreases over time (due to less bitcoin in circulation due to hodlers) and increased demand will increase the price of 1 bitcoin.
Price spikes may also happen suddenly due to increased demand in bitcoin and constant supply. Meaning, if a lot of people want to buy bitcoin and there is a limited number of bitcoin on sale, the price can increase rapidly.
This means that people who bought bitcoin at a lower price can earn profits, if they sell some of their bitcoin at the higher price. Or they can hold their bitcoin (hodl) which decreases circulating supply and therefore can increase bitcoin price.
You dont need to buy 1 whole bitcoin. You can also buy 0.5, 0.03, 0.0001 btc. The smallest unit of bitcoin is a satoshi and equals 0.00000001 btc.
Q: If Bitcoin isn't bad, why do famous financial gurus like Warren Buffet warn us to stay away from it?A: Banks, gurus and governments want the world to stay as it is. They dont want to lose power, influence or profits to bitcoin. Therefore they spread FUD (fear, uncertainty and doubt) and false assumptions about bitcoin, to discourage people to use it.
Bitcoin can be liberation from financial institutions like banks and credit card companies. People can use bitcoin freely and anonymously like cash, without required trust in a third party (how can you know that your bank keeps your money safe? that it doesnt invest your money into causes you disagree with? that it cant be stolen or seized?).
Bitcoin can be a viable alternative to Paypal, banks and credit cards to buy online and in person, as you dont need to trust a financial institution with your money. With bitcoin, people can send money internationally to anyone with processing times as low as 10 minutes and fees as low as 50 cents. No monthly fees, personal information or long contracts required. Bitcoin puts the control back in your hands - if you protect your bitcoin private key, only you have control over your money and no one else can access it.
It is clear to see the benefits of bitcoin over traditional payment methods, and banks can see this too. Bitcoin is a competitor to banks and some banks see it as a threat, while other banks greet bitcoin and even integrate crypto trading into their offers.
That is why it is better to do your own research and read multiple sources, instead of naively believing "gurus" or "leaders". These people can have agendas and give misleading information to discourage people. Therefore as with any research look at a variety of sources and think critically about the information you read.
Q: How do I cash out Bitcoin?A: You can cash out bitcoin to fiat (bank transfer, cash, etc) via many routes.
If you want to sell bitcoin for bank transfer, you can use a centralized exchange such as Coinbase.com (US), Poloniex.com (Intl) or Bitpanda.com (EU). Localbitcoins.com and Liberalcoins.com are decentralized p2p marketplaces that also offer bank transfers.
If you want to sell your bitcoin for cash, you can check Localbitcoins.com and Liberalcoins.com for cash in mail or cash in person trades. Bisq (
https://bisq.network) is another decentralized exchange. Additionally you can check local bitcoin meetups or find a buyer in the Local topics in Bitcointalk. Some cities have bitcoin ATMs where you can sell bitcoin directly for cash at any time, you can check the list here: Coinatmradar.com This is the most anonymous way to cash out bitcoin, as it doesnt require KYC (scan of passport or drivers license).
Additionally there are some bitcoin prepaid debit cards (VISA and MasterCard). You order the card, receive it in the mail, then transfer bitcoin to the card (your balance will be in USD or EUR). Then you can spend the funds in any online or brick and mortar store and withdraw funds from regular ATMs. Some current providers are Wirex (EU), WageCan (Intl) and BitPay (US).
There are other ways to cash out bitcoin, such as to other payment processors like Skrill or PerfectMoney, to store giftcards or prepaid phone credit. You can check decentralized exchanges such as Localbitcoins.com and Paxful.com to see these other methods.
Q: Is Bitcoin safe?A: Bitcoin is safe if you protect your private keys. It is better to use a paper wallet (access with
https://coinb.in), trusted desktop wallet like Electrum or secure hardware wallet like Trezor or Ledger. Dont share your private key with anyone and ignore all phishing emails/social media messages. Check wallet and exchange urls and bitcoin addresses carefully to avoid typos. If you use Windows, use anti-virus software to protect against viruses that can steal bitcoin. If you buy or sell a product or service for bitcoin, make sure to use a trusted escrow. If you trade bitcoin, dont keep your money on the exchange - transfer it to a wallet that you control and only transfer to exchange when you want to immediately trade. Avoid HYIP programs, bitcoin doublers and cloud mining as these are generally scams. Be careful when you invest into any coin or ICO, as the market could always change and there are no guarantees or refunds.
Good advice for the world of crypto: 1) Keep your private keys safe and private 2) Never invest more than you are prepared to lose
Q: Who controls Bitcoin?A: No single person or group controls bitcoin. Bitcoin is a decentral cryptocurrency, which means thousands of people cooperate worldwide to provide full nodes and miners.
The bitcoin technology itself was created by Satoshi Nakamoto and is developed by Bitcoin Core team. The Bitcoin code is open source, which means anyone can audit it. It is possible to contribute to the code and suggest improvements.
Due to blockchain technology, no one can reverse confirmed transactions and generation of new coins requires proof of work (electricity costs) and the total supply of coins is limited, which means that no one can generate new coins from nothing and cause inflation. Due to cryptography, it is currently computationally unfeasible to crack a bitcoin private key. The only way to lose your bitcoin is if you store it with a third party (exchange or web wallet), publish your private key (accidentally or due to phishing attack), or you lose it and dont have backups (always keep encrypted backups of your private keys on different mediums).
The price depends on supply and demand. While the media can influence hype or FUD and whales can influence the market, no single person can decide the price of 1 bitcoin in USD.
When you own bitcoin in a wallet, it is under your control. No one can seize or steal it, as long as you keep private keys safe.
Q: Will Bitcoin make me rich? (asked by Walrus1 here)A: There is no guarantee in any market and useful advice is "Dont invest more than you are prepared to lose". While there are good reasons for bitcoin to increase in value, nothing can be guaranteed.
Bitcoin offers many opportunities to earn money online - from trading, sale of goods or services or mining - and many people profit from bitcoin.
However, bitcoin is a currency and not a get-rich-quick scheme. You can definitely earn money with bitcoin, but you need to make effort. Check bitcointalk.org and reddit.com/r/bitcoin to learn how to earn with bitcoin.