where does the currency come from? What creates the currency? How much currency is flowing through the system? How do you monitor that and regulate it? How do you prevent it from being inflated? How do you keep people from fraudulently creating currency? How do you keep someone from, if they have some, from reusing the same currency? All of that has been solved with this system in some very clever and very new ways.
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in the same way that the abbreviation for U.S. dollars is USD, and euros is EUR, BitCoin's abbreviation is BTC
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imagine that there are, among all these peers, there are people exchanging value. They're exchanging bitcoins. A bitcoin exchange is somebody wants to send somebody else some bitcoinage. So the whole system works with an asymmetric key system, a public key system where they have both a public key and a private key. They take some amount of bitcoinage and put their public key, sort of associate or include their public key in the transaction, also the public key of the person it is being sent to. And then they sign it with their private key.
So what that creates is, that creates a transaction that only they could have originated because they're the only ones who have their private key, which they keep secret.
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Now Google "bitcoin miner," as in a gold miner. What's happened is that there are people on the 'Net that have built bitcoin-creating boxes with as many graphics processing units as they can get, with fans cooling them, they're overclocked, they're pouring Freon over them. These things are running 24/7.
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There will never, ever, ever be more than 21 million bitcoins created.
