Quote from: scoupafi on March 31, 2013, 12:55:49 PM

Are bitcoins generated from scratch?

I suppose that depends on what you mean by "from scratch", but yes bitcoins come into existence without being backed by anything physical or tied to anything else of value.

Quote from: scoupafi on March 31, 2013, 12:55:49 PM

Is the value of each bitcoin changing over time and if it's not, then this is why the number of bitcoins awarded each time a block (if I'm saying it right) is decoded changing every 4 years?

The value of each bitcoin is controlled by market forces (supply/demand). At any given moment it is worth exactly what one person is willing to accept to sell it and another person is willing spend to buy it. Blocks are not "decoded" they are "encoded". The amount of bitcoin awarded started at 50 BTC per block for the first 210,000 blocks, and is cut in half after each 210,000 blocks. This is the controlled method that new bitcoin are released into the market as well as the initial method of rewarding the "miners" (transaction confirmers) for the work they do. As the reward slowly drops over time it is expected that the value of the transaction fees will increase until eventually the "miners" will earn most of their revenue from transaction fees rather than from the block reward.

Quote from: scoupafi on March 31, 2013, 12:55:49 PM

Why are bitcoins given to individuals, for what kind of work?

The protocol rewards those who do the work of confirming transactions in blocks. In addition, anyone with bitcoin can use their bitcoin to pay anyone else for any sort work if they both agree.

Quote from: scoupafi on March 31, 2013, 12:55:49 PM

From the little things I've understood, bitcoins are given when a block is decoded and thus verified that a bitcoin transaction has actually happened

It would probably be more accurate to say that they are given when a block is "encoded" and thus confirming that many transactions have actually happened.

Quote from: scoupafi on March 31, 2013, 12:55:49 PM

but then the actual value of a bitcoin would just be fictional and not representing any actuall value.

It represents the value that the market assigns to its usefulness.

Quote from: scoupafi on March 31, 2013, 03:39:24 PM

From what I understand the amount of bitcoins that are generated are specifically created in order to keep the market fluid, but how is inflation avoided altogether? (or is it?)

Initially as the currency is released into the market inflation of supply has to exist. There is no way to increase the supply without inflating the supply. However, as long as the adoption of the currency outpaces the supply inflation the market will experience price deflation. This is let to the market to handle freely and is not controlled beyond controlling the rate at which new currency is released.

Quote from: scoupafi on March 31, 2013, 03:39:24 PM

Also, can somebody explain what is hashing, because I can't seem to figure it out Roll Eyes

http://en.wikipedia.org/wiki/SHA-256