Grab me for reposting: http://www.youtube.com/watch?v=FkgAgUsTstg
The original Bitcoin whitepaper: http://bitcoin.org/bitcoin.pdf
Bitcoin FAQs on copying files: Just copy the file!
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Question: Why can’t bitcoins be counterfeited?
Bitcoin exists online, but is not a computer file, and cannot be copied. So, what is Bitcoin?
Bitcoins exist only as values in a ledger; But this is no ordinary accounting ledger.
Imagine a huge record book containing the value and entire history of everybody’s bitcoins.
Everyone using the bitcoin program, all over the world, has a copy of this ledger.
In order to counterfeit bitcoins, for example to be able to spend 5 bitcoins when you only have one, you will need to modify the value of your bitcoin on the global ledger that everyone has a copy of.
The problem is, even if you are able to hack into a couple of computers to change the amount of bitcoins you have, there will still be many thousands of computers out there with a copy of the truthful ledger showing that you only have 1 Bitcoin, not 5.
So in order to spend your bitcoins, the majority of ledgers need to agree on their value.
Since no one can hack so many computers all over the world at the same time, bitcoin cannot be counterfeited, and your attempt to spend bitcoins you don’t have would be blocked instantly.