What is Bitcoin?
Everyday more and more people are hearing about bitcoin. If you’re reading this then you’re probably one of those people. So, what is Bitcoin exactly and why should you care?
Bitcoin is the world’s largest and most secure cryptocurrency. It runs on a decentralized ledger called a block chain. This is basically a database that is distributed across hundreds of thousands of computers around the world. This essentially makes it tamper proof.
The thing that makes Bitcoin special is that it is fully decentralized. Nobody runs it or controls it. It also has a fixed supply. These two points are what really sets it apart from fiat currencies like the US Dollar, the Euro and the Pound.
Regular fiat currencies are are controlled and manipulated by their respective governments. This is bad for the average person. When governments continue to print money out of thin air the value of that currency goes down as the supply increases. This is what we call inflation. In some cases excess money printing can lead to hyper inflation like in Venezuela where their currency became practically worthless.
Because Bitcoin is decentralized it is beyond the control of any government. It can’t be shut down. It’s ever decreasing supply which is written into it’s code means that extra Bitcoin can’t be printed out of thin air. Hyperinflation will never be a problem for you if you hold Bitcoin.
Bitcoin Keys – What Are They?
This article is just trying to answer the question “what is Bitcoin” in the simplest terms possible. I don’t want to overload you with too information all in one go..
Having said that, we have to talk briefly about Bitcoin keys.
You may have already heard about Bitcoin wallets and assumed this is where you keep your Bitcoin obviously! Right? erh.. No, actually that’s wrong.
You may be surprised to learn that when you own Bitcoin, it stays on the blockchain! So what do you keep in the wallet? Your Bitcoin Keys! If you have your key then you control what happens to your Bitcoin. With your private key you can send your Bitcoin to someone else anywhere on the planet.
So you have your Bitcoin address. Then you have a public key which anyone can see and a private key which you must keep safely locked away.
Don’t worry about this too much for now. Just remember that you never reveal your private key to anyone!
This might seem like a lot of information to take in, but stick with it!
For Now Just Think About The Following:
- Bitcoin is a Decentralised Crytocurrency.
- It Runs By Itself and No One Controls it.
- It is Peer to Peer Digital Cash – Nobody Can Stop You From Using it.
- There will only ever be a total of 21 million bitcoin.
- Only around 17 million have been put in circulation so far.
- Every day, a pre-determined amount of bitcoin are produced. This is called bitcoin mining.
- Once every 4 years the amount of bitcoin that can be produced is cut in half. This is known as the halvening.
- Since bitcoin was first invented in 2010, several million bitcoin have already been lost forever. This has further reduced the supply.
- 1 bitcoin can be divided into 100 million satoshis, much like $1 divides into 100 cents.
- When you own bitcoin you control it with a private key.
- There is not enough Bitcoin for all the millionaires in the world to own 1 bitcoin.
- If You Lose Your Bitcoin Keys Your Bitcoin is Gone Forever
These are the key points about what makes bitcoin different from paper money in your back pocket. With a fixed amount of bitcoin and an ever decreasing supply, coupled with the fact that each day more people decide to buy bitcoin, the price will go up over time. It is the simple economics of supply and demand.
Bitcoin is a scarce commodity. A hard currency that cannot be censored. It can be transmitted to someone on the other side of the world in a matter of seconds and at very little cost. And most importantly, you don’t require permission from a 3rd party.
Bitcoin is peer to peer money.
It is money for a digital age.
If you’ve made it this far then I guess you’re interested! Stick around and read as much as you can. If this is your first step towards owning Bitcoin then you still have a lot learn. You don’t need to know the exact workings of Bitcoin but you do need to know how to buy it safely and how to look after properly once you have it.
When you own Bitcoin YOU are the bank. You are responsible for it. If you lose your private keys then there is no phone number to call. There is nobody to help you.
Your Bitcoin is gone forever and everyone else’s Bitcoin became a little more valuable.
Magical Internet Money
This is the documentary that really peaked my interest in Bitcoin. Sit back and enjoy. This might just change your life.