What is Bitcoin? I’ve had many people ask me this question because they know that I am familiar with the financial markets. Recently, this question came from my wife. Like many others, she has heard of bitcoin but has no idea what it really is. Well, don’t worry, I’m here to help you understand what Bitcoin is and what it can be used for. Also, how can you participate in this ever-growing movement of bitcoin owners/traders?
To answer this question, I took some time to really do research on the subject. I already knew what bitcoin was, I knew more than the basics but in order to educate others in the subject, I needed to have expert knowledge. So, I spent a few days just reading and researching to learn as much as I can. This article contains the basics of what I have learned. It has been simplified in many instances to help non-technical/ non-financial individuals to walk away feeling satisfied that they finally get it. My hope is to not have you walking away feeling like that guy below:
Bitcoin and the millennial Generation
If you look at my logo, you can see that it is influenced by the bitcoin revolution. I’m willing to bet that in 20,30,50 years from now, when the world thinks of the millennial generation, they will undoubtedly associate us with the cryptocurrency market (wherever that may be by then). So, let’s get started on what bitcoin is.
What is Bitcoin?
Bitcoin is a cryptocurrency that is electronically created through “mining”. To mine a bitcoin, you need to have really fast and powerful computers that can solve very complex mathematical equations. When the equation is finally solved, the “miner” gets a Bitcoin. Each equation that is solved is more complex than the one before it. Because of this, each Bitcoin that is mined will take more and more computing power than the one before it.
Related Article: Should I invest in Bitcoin?
How is Bitcoin printed and how is it used?
This cryptocurrency can be used to buy things electronically just like any fiat currency. It can also be traded on an exchange in the same manner. The only difference is that it is not traded with fiat currencies on the FX. Instead, it has a separate platform of its own.
Bitcoins are not printed like dollars, they are complex and unique and can never be duplicated (theoretically). The decentralization of Bitcoins along with the fact that there can only be 21 million Bitcoins is what makes them special.
Who is the creator of Bitcoin?
Bitcoin was created by Satoshi Nakamoto, a software developer. His idea was to produce a currency independent of any central authority, transferable electronically and as close to instant as possible with very low transaction fees. Bitcoin can be divided into smaller parts however; the smallest divisible amount is one hundred millionth of a Bitcoin which is called a Satoshi (name after the founder).
What is the Blockchain
The Blockchain is a general ledger where Bitcoin stores all the transactions that have ever happened in the network. This is where mined Bitcoins go to be verified. If you have publicly used Bitcoin addresses, anyone can tell how many Bitcoins are in that address because of the blockchain however, because of Bitcoin’s anonymity, they won’t know exactly who the address belongs to.
Also, Bitcoin transactions are nun-refundable unless the recipient agrees to return the Bitcoins back to you. If they don’t, they are gone forever!
Is that it?
Yes, in a nutshell… that is basically it! I told you, I was going to try to make it as simple as possible to understand. If you were able to follow all that then congratulations, you now understand what Bitcoin is, its origin and how it is used. If you think you have additional useful information to add to readers, comment below and tell us your thoughts! Also, don’t forget to subscribe to our newsletter to receive more Bitcoin/cyrptocurrency news along with other financial news and ways to help you reach financial independence.