So let’s start by answering the question what is Bitcoin?
Bitcoin is very simply a decentralized digital currency, in other words, it’s kind of like virtual cash or gold. And it’s transferred person-to-person which means that there’s no bank or government control or prerequisites to be able to own or transfer Bitcoin. And the symbol for Bitcoin looks like this B with little hashes through it or BTC kind of like USD for US dollar. Now Bitcoin is a crypto currency and cryptocurrenciess have been around since the 1980s but there was a major problem called double spend. All of the prior digital currencies or crypto currencies have had the problem, where if somebody spins a unit or that currency it’s been very difficult to tell if it’s already been spent and that’s the biggest problem that Bitcoin has solved. Why it has gained so much popularity and the way that it does this is through its distributed peer-to-peer network which works kind of like bit torrents. The first Bitcoin was actually issued in 2009 by someone apparently named Satoshi Nakamoto. This is believed to be a PIN name and nobody really knows who started Bitcoin so there will actually only ever be 21 million bitcoins in circulation and in 2009 we had the first bitcoin that were released and there is a predetermined amount of bitcoin that are released every 10 minutes. Over the years this will continue to happen until the year 2140 and bitcoin is divisible down to the eighth decimal place. So the US dollar is divisible to the penny or two decimal places you can almost infinitely breakdown Bitcoin to a very very very small amount. The Bitcoin protocol or the Bitcoin network the way that Bitcoin operates since there’s no central location that’s governed by any specific country it’s very difficult and expensive to hack and there’s some numbers that say to even hack the Bitcoin network for ten minutes would cost around half a billion dollars and so there’s a lot of trust and a lot of vetting of the protocol and the network that has happened over the past few years and it’s basically controlled by the consensus of market participants so again no one government, no one person or no one group actually controls the Bitcoin network. Which is why it’s gaining so much popularity. So why is Bitcoin so important and there’s some aspects of crypto currencies that I think show huge prospects for really changing the world. Let’s look at this first fact that out of the seven plus billion people that live on the planet about six and a half billion people don’t have access to basic financial and banking service like checking accounts or credit cards and in the US alone it’s estimated that about eighteen percent of people don’t have access to these basic financial services and Bitcoin makes it very easy for anybody without government permission or control to have access to virtual banking. And I think that’s really going to change the world the second fact that we’ll look at here is since the 2008 financial crisis fiat currencies like the US dollar and if you’re not familiar with what fiat currencies are, it’s a currency like the US dollar that’s backed by nothing but the trust that people have in the government you know back in the 70s we were on the gold standard and Nixon took us off of the gold standard so now the US dollar is not really tied to anything. And I’ve always kept this hundred trillion zimbabwe dollar as kind of a reminder of what can happen when government get out of control by printing too much money.
You know in the span of than two years the Zimbabwe government essentially devalued their currency to nothing and there are a lot of people that are speculating that some of the major world’s fiat currencies are going in that same direction. And it’s kind of scary because right now the US dollar is the world’s reserve currency and we’re just printing it like nobody’s business, and so the way that Bitcoin handles this problem is that there is a predetermined set amount of bitcoins that are going to be released over the years and what that does is it’s inherently designed to be deflationary and really control inflation and the third kind of major problem that Bitcoin really handles is a fact that cross currency purchases and transfers across borders you know cross country borders are expensive and have a lot of friction a lot of government red tape and if you want to move millions of dollars that costs a lot of money where with Bitcoin it’s very very inexpensive and there’s stories of people moving millions and millions of dollars for just few pennies.
