Bitcoin buy.. what is bitcoin.. Is it legal? Who's behind it?

what is bitcoin? 

"Bitcoin" is a decentralized means of tracking and assigning wealth or economic value.  Bitcoin is a software protocol, computer network, idea, community, movement, etc.

A "bitcoin" is a unit of the currency that is moved around by the Bitcoin network.

Central to Bitcoin is a public ledger, known as the Block Chain.  Roughly every 10 minutes, a new "block" is added to this chain or ledger. This ledger records all of the transaction that have taken place in the last 10 minutes, and what quantities of bitcoin currency are now held at different public addresses.

A public address is a a 27 to 34 character string of uppercase, lowercase letters and the digits from 0 to 9. AKA base 58.

Each public address has a corresponding private key. Whoever has this key, may spend the coins that are held at this private address. Private keys are 51 characters long in the same format as a public address.

To spend an amount of bitcoin, you must use your private key to cryptographically sign the transaction, sending your bitcoin to another address.

This message or transaction is then broadcast to the network, and the computers in the network begin working to write into the block chain (or public ledger) that your address no longer has the amount that was sent, but that that amount is now held  at the receiving address.

Each new set of transaction is recorded on the block chain, every 10 minutes as mentioned above.

All of the computers that are working to write new blocks to the block chain, are known as miners.

These computers are all racing to solve a cryptographic puzzle, which si required to write the new block.

The computer that solves the puzzle, and writes the new block receives an award of newly created bitcoin.

The reward associated with each block began at 50 in 2009, is now 25, and will halve every 4 years, until an ultimate quantity of 21 million bitcoin are created.

This transparency is a large part of the value created by Bitcoin, in that the rate of creation, and current amount in existence is known.

How does bitcoin work?

                                            

The basics for a new user

As a new user, you can get started with Bitcoin without understanding the technical details. Once you have installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose your addresses to your friends so that they can pay you or vice versa. In fact, this is pretty similar to how email works, except that Bitcoin addresses should only be used once.

Balances - block chain

The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.

Transactions - private keys

A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining.

Processing - mining

Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.