Hello everyone. I have just recived the confirmation e-mail and i felt a mix of excitement and fear as i didn´t know what should i post or talk about here, so i figured out that i wanted to talk about bitcoin.
I’m not a profesional but i have been reading a lot about crypto and i really like the subject. I want this post to be an easy way for everyone to understand what bitcoin is, as i know it can be hard at first. I know this because in my country (i'm from Argentina) everytime the media talk about bitcoin it's evident that they dont know what they are talking about and it can lead to a misunderstanding.
I’m going to start answering some of the questions my family and friends ask me when i tell them about bitcoin.
1) What is bitcoin? What is it's purpose?
Bitcoin is a decentralized coin, this means no third parties such as financial institutions are involved. This way you won't have to trust your money to anyone (for example, Banks) and you will have full control over it. As it's White paper says (a White paper is where the creator(s) explain the purpose and step by step of the cryptocurrency) bitcoin is a P2P (peer to peer) electronic cash system. This means i can send money to another person without the need of a bank. The term decentralized means that the coin is not emited by any company, government or bank, i will explain that later on. This coin is also anonymous, so nobody will keep track of what you are buying or what you are doing with your money. https://bitcoin.org/bitcoin.pdf
2) Who created bitcoin? When was bitcoin created?
Nobody knows who created bitcoin exactly, the only thing we know is a pseudonym of the person/people who created it; “Satoshi Nakamoto”. Satoshi created bitcoin in 2009. And then dissappeared.
3) How can i get bitcoin if there is no bank or company involved?
Like gold, bitcoin can be mined. Anyone can be a miner, you can be a miner if you want to. The way to mine bitcoin is with computational power (cpu, electricity). I'm going to show you some videos from now on as it gets more difficult to explain with only words.
4) What makes bitcoin so valuable?
The technology behind bitcoin is what makes bitcoin so valuable, the blockchain. This technology keep track of every transaction in the world made with bitcoin. The miners are the ones who maintain the transactions. The difference between blockchain and a bank is that the blockchain is decentralized. I will give you an example, if a haker wants to steal money from a bank, they just need to hack their accounting book which is located in only 1 database, making it possibly for them to hack it. With blockchain a hacker would have to hack every miner in the world to be able to steal money from the blockchain.
Some people may think that this is not completely anonymous as the miners keep track of your transactions, it doesn´t matter, the miner will only see an adress when checking transactions and that adress will change everytime you make a transaction so you can´t be tracked.
5) What is the incentive for the miners?
A miner uses a lot of electricity, and the cpu´s aren´t cheap, so.. what do they win?
By mining they get portions of bitcoin, these portions of bitcoin can be sold later on for fiat money, or they can hodl the bitcoins as an investment and sell them when the price goes up.
They also get a fee for mainteining the transactions, as they are the ones who “approves” the transactions. I will give you an example, if i want to make a transaction and i want the transaction to be really fast i need to give the miners a higher fee so they “check” my transaction faster than other people´s transactions.
6) Where can i storage my bitcoins if there is no Banks involved?
As i said before you will have full control over your money, so you won´t have it in a bank. In order to successfully storage your bitcoins you will have to download an offline wallet. You can have your wallet in your cellphone or in your computer.
The main utilities of the wallet is to been able to send, recive and storage bitcoins. You will have an adress that you will use to recive bitcoin. And in case you want to send bitcoin you will have to ask for the public adress of the person you want to send these bitcoins to. You will also have a private adress or key that need to be kept secret, as it is the “key” to your wallet, and if someone else have that key, it also means it will have your bitcoins.
7) Why is bitcoin price so high and volatile?
The bitcoin price varies depending on the supply and demand. So if a lot of people wants to buy bitcoin, the price will go up, if a lot of people wants to sell their bitcoins the price will go down. As bitcoin is not regulated the price can go from $11000 dollars to $9000 dollars in just hours.
8) Until when we are going to be able to mine bitcoins?
It is expected that all bitcoins will be mined by 2140 and there will be only these bitcoins in circulation, which will make its price to go up. For example, the USD will lose its value with time because there are a lot of dollars printed each year, the bitcoin will gain value like the gold because there is a “limited stock”.
Well, i hope i helped some of you to understand bitcoin a little bit more. I really enjoy sharing what i know about bitcoin, i know it is not a technical post but as i said before i wanted to “introduce” everyone i can to this incredible and revolutionary coin. Hope you liked the post, english is not my native language so this post may have some typing errors, sorry about that. Once again, hope this help you all, have a nice year and for those who have invested in cryptocurrency i wish you all the best. I will be glad to answer any question you have, or to correct any possible mistake. All credits goes to the creators of the videos, i didnt create any of those videos.
