What is Bitcoin? Money with no bank keeping the accounts

Rono lives in another country, and he sells you his old film camera. He wants 0.01 bitcoin for it. You have some bitcoin in an app on your phone.

So where is that bitcoin? Not inside your phone. There is no coin, and no file you could copy. Your app only shows a number.

With normal money, your bank keeps a list of who has how much. When you pay, the bank changes two lines in its list. You trust it to keep the list right.

Bitcoin has a list too: every payment since the first day, in 2009. It says who sent how much to whom. This list is called the ledger. Your bitcoin is simply what the ledger says is yours.

But no bank keeps it. Thousands of computers around the world each keep a full copy of the ledger. Miva runs one on a small computer at home. Each of these computers is called a node.

When you pay Rono, your phone sends the payment to a few nodes, and each one passes it on. Soon every node knows about it. No bank and no company stand in the middle.

That is the trouble. Anyone can run a node, and anyone can send a payment. A stranger could send one that says: "Rono pays me 10 bitcoin."