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When talking about Bitcoin, it's useful to distinguish between two things: the Bitcoin network with the technology behind it (blockchain) and the means of payment (bitcoins). We'll explain more about the technology behind Bitcoin later, but first we'll limit ourselves to paying with bitcoins: these are the digital "coins" sent over the network in transactions and representing a certain value.
Bitcoins can be used to make digital payments without having to go through a bank or other company. You can see it as a kind of digital cash. Officially, however, it is not yet recognized as currency in the Netherlands.
Paying with bitcoin
Sending and receiving a payment is as easy as sending an email, only you don't send bitcoins to an email address, but using a bitcoin address - a series of numbers and letters - through the Bitcoin network. This is a decentralized, peer-to-peer network similar to Bittorrent. So the network is spread all over the world; anyone can join.
Payments are stored in the Bitcoin network in a large public transaction log. How many bitcoins belong to which bitcoin address is listed in this log, so the whole network agrees on all bitcoin balances. The 'keys' you use to issue your bitcoins are stored locally in an app on your phone or computer. So you manage the access to your bitcoins yourself: you are your own bank.

The advantages
With its decentralized nature, proven mathematical principles (cryptography), and large amount of computing power in the network, Bitcoin offers a highly reliable payment method that is very suitable for both small and large payments. It is open source, so anyone can control it, and no one can stop it. Other benefits include
Anonymity (Public transactions, but you basically have control over whether a transaction / address can be traced back to you).
Relatively low transaction costs, especially for international transactions
Payments are worldwide and almost instantaneous *
Payments are irreversible
Unfortunately, Bitcoin doesn't just have advantages, the decentralized character comes with a price. For example, Bitcoin requires a lot of user responsibility, decision making is difficult, mining costs a lot of energy, and the decentralized way of storage, although secure, is not very efficient. For large transaction volumes and micropayments, Bitcoin is too expensive. Fortunately, we are working hard on smart solutions to make Bitcoin more scalable.

* Bitcoins generally arrive at the recipient within a second, but it takes another hour or so before you can assume that the transaction is final. This has to do with the blockchain, which the transaction must be included in. We will explain this further on.


Source: bitcoin.nl