What is Bitcoin? Read everything you need to know.
This article discusses exactly what Bitcoins is. So what is Bitcoin? What’s its use right now? Should you invest in Bitcoin? If you’re new to Bitcoin or you’ve already invested, this could help. Firstly, the point of Bitcoin, let’s talk about anonymity when you’re using cash. For example, you’re in a grocery or somewhere else and you’re paying for something with cash. I know it sounds obvious, but I realize that the cash doesn’t have your name on it. Nobody can actually pinpoint whose cash that actually is. However, the drawback at the moment with, for example, credit and debit cards because you don’t really use cash, is that it has your name on it, has your details, address, etc. So if you make some big purchase online it is very, very clear who’s making that purchase, even if you can change the delivery address to somebody else.
So one of the rules of Bitcoin would have been to maintain that anonymity by using long kind of Internet source code links, almost like long view URLs. And nobody can really pinpoint then in a Bitcoins transaction who actually is paying and who’s actually receiving the Bitcoin. So it’s a lot like cash was, even though nowadays we don’t really use cash at all. So the problem is it’s not really an anonymous system. The next thing with Bitcoin that you need to understand is there’s a limited quantity. And although they’re still mining going on and I’ll discuss that shortly, we’re pretty much at the point where 85 percent of the bitcoin that’s out there already exists in circulation. So we’re nearly up maximum levels. And that’s really key to understand because the alternative is fiat currencies and fiat currencies are basically like monopoly money to just to make it short and sweet for you. Why is it like Monopoly money? Well, the dollar bill, for example, or a 10-pound note itself, it doesn’t actually have any intrinsic paper value. The value all comes from what we believe, which is at the moment that we all trust that these dollar bills or pound notes will buy us something and we’ll be a money exchange. Now, whether that changes in the future, that’s something we’ll be discussing in this article.
So previously, for example, when they printed a dollar bill, they would be promising you a dollar, but you could always exchange that dollar for a certain amount of gold. That’s not the case anymore. So that what’s happening right now, as you probably noticed, is we’re printing more and more money. And that’s what you can do in fiat currency. When Bitcoin, you can’t just print or create more or more Bitcoin, almost all of the Bitcoin that will ever exist is already in circulation. So that limitation gives it more value and gives it more trust. Next, open, decentralized, or what does this mean? Or basically at the moment, in theory, as long as you have an Internet connection anywhere in the world, let’s say you’re in a random village in the middle of the Amazon rainforest. You can buy Bitcoin, sell Bitcoin, exchange Bitcoin as you please. Nobody needs to check anything about who you are. Where are you from? Etc.. In theory, you just need the Internet and a click of a button and you’re up and running. How is that different from the system we have right now? Well, a lot of you will know with bank accounts that we in a centralized kind of system at the moment where even just open a bank account, for example, you need lots and lots of details, lots and lots of IDs and other proof. And even then, the bank is in control. They can take your money and do as they like with it.
And they will also keep a log of all of your transactions is all they’re printed. Clearly, your bank knows where you’ve been spending your money on the next security. And the flip side will discuss as well. And before I discuss this, have you enjoying the article? Please click the like button and share it below. So the way it works with Bitcoin, let’s say you’re making a transaction to a friend. So you click a few buttons and then Bitcoin is sent to your friend. Well, when that transaction actually occurs. One thing that is necessary is to make sure you’re not using Bitcoin that you had already spent. So it is known as a kind of like double spend. And the way Bitcoins and other cryptocurrency is getting around this is that they monitor from many, many computers across the globe whether this transaction was basically genuine. That’s a shortcut. Therefore, you don’t need to get into blockchain. All of this stuff to overcomplicate things. The bottom line is it’s a more secure system and the community in a sense works together to keep it secure. Now, why would people hook up lots of computers to make sure this is a secure system? Well, they get a reward in Bitcoin for doing this is a small kind of reimbursement for their time and the amount of electricity pretty much they’re using to monitor these transactions.
And this all goes back to the concept of control with Bitcoin. You have full control over what’s going on with your spending and your money remains anonymous, means secure, and you don’t get the horrible scenarios like this. This is what is bailin. So basically, if you never heard of this before, this is you depositing your money in a bank. And eventually, if the bank is either struggling or taking risky speculative kinds of investments with your money, they could end up losing it all. And if they don’t get bailed out by the government, they’re going to take your money and thus the bail. And that money is going to be used to pay off whatever debt the bank gets into. Now, I know that sounds crazy, but just research on Google Balans and you’ll see that in some countries this has actually happened already. So that’s it. With Bitcoin and cryptocurrency as an alternative to the system of currency.
Check WHAT’S BLOCKCHAIN to read more about them (Miners).
By this stage, I believe you’ve understood what Bitcoin is and why you should choose it over currencies. In our next article, we’ll be discussing how you can make money with Bitcoin. Make sure you subscribe to our Newsletter to be the first to get this on your mailbox.
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