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What is Bitcoin?

 

Bitcoin is the culmination of years of debate, trial, error and problem solving. It is a digital ecosystem that can transmit monetary value across the border-less, worldwide Bitcoin network.

 

A single unit of Bitcoin is referred to as a ‘Satoshi’ (after the founder of Bitcoin’s surname) and the network is accessible from almost any device imaginable.

Bitcoin is used for multiple purposes. It is seen as a store of value, a transactional currency and a virtual ‘gold’.  It even has the ability to create ‘smart contracts’ (not to the extent of Ethereum however which is another ‘crypto’).  In addition, Bitcoin is an open source software which can be scrutinized and developed on by anyone in the world.

Traditional currency uses a mix of virtual and physical value.  A centralised ‘bank’ controls the supply and distribution of money.  Bitcoin does it differently.  There is no one person that has central control over Bitcoin, it is decentralised.  To change anything to do with Bitcoin there must be consensus between the majority of users.  This is very hard to achieve, which in turns gives the digital currency very high stability and safety.

Bitcoin transactions are stored on a blockchain which is a digital ledger of everyones accounts and transactions from the beginning of Bitcoin (the genesis block).  Your Bitcoins are protected by high level encryption and digital signatures, which are theoretically impossible to crack.  Bitcoin can be traded on the open market using, exchanges such as Easy Crypto.

New Bitcoins are created through a process known as ‘mining’.  Miners use specialised hardware (CPU’s, GPU’s and ASIC’s) to do two things. First they create new Bitcoin by attempting to be the first to solve a randomly generated mathematical problem.  Secondly whilst doing this they are facilitating the confirmation of transactions between people on the Bitcoin network.  This process of verification is called ‘Proof of Work’ or POW.  It is in all miners best interests to honestly complete this task, as any variance to exactly what the network expects will block that miners transactions and make their participation null and void.  In completing this task the miners are helping secure the Bitcoin network, facilitate transactions and earn Bitcoin for their work.

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So Bitcoin is peer to peer with no middle man.  It is ‘trustless’ in the fact that no transaction can be altered or reversed so trust in the transactional process or the buyer/seller is not required.  Bitcoin is borderless which means it can be bought and sold worldwide with the same transaction cost as sending it locally and much cheaper than a traditional international bank transfer.  Anyone with a basic smart phone and internet data can transact and begin to share value or services in return for bitcoin which makes the next point extremely important.  It can bank the unbanked and………

Lastly Bitcoin is a revolution.