What is Bitcoin – Explained Simply
So, what is all this Bitcoin nonsense anyway? Well stick around, I’m going to answer all these questions and much more in my upcoming cryptocurrency video series.
Hey everybody, Steve here and today I want to start a video series on something that still seems to remain a mystery to most people and that is this whole world of Bitcoin and other cryptocurrency.
I’ve been dabbling in Bitcoin for probably around 6 months now and I’ve been talking with various people about it and everybody seems to have the same question and that question is, what the hell is Bitcoin and what can I do with it?
Well in its simplest terms Bitcoin is a digital currency that allows you to buy things on the internet without using cash or credit. And the thing that differentiates Bitcoin from what we already know is that there’s no bank behind Bitcoin, there’s no government behind Bitcoin. So, to that end it’s completely decentralized, there’s no middle involved in the transaction. Normally in a business transaction of person A wants to transfer money to person B, they can
a) pay by cash or
b) pay by credit card which goes through the bank or
c) pay by a check which goes to the bank.
With Bitcoin there is no bank so money can go straight from me to you without involving any bank whatsoever, so therefore it’s known as being decentralized.
Ok, so the inventor of Bitcoin limited production to 21 million Bitcoin and as of January 2018 close to 17 million of these Bitcoins have been mined. Mining is a little confusing but go ahead and kind of hang with me here for a second.
Mining is a process of pooling lots of computer resources together to solve complex mathematical computations and these mathematical computations are essentially the Bitcoin transactions. So, when you do a Bitcoin transaction with somebody your Bitcoin transaction is lumped into a block of many many many other transactions and the computers go to work and there’s a lot more to it than this but just in an effort to keep it as simple as possible the computers verify that the transaction is legitimate, it verifies the source, ensures the funds are there, handles the encryption and then combines it into a block of transactions. And you may have heard the term Block Chain.
Block Chain is a technology that is kind of like a general ledger. It takes all of these blocks and it is a transparent record of every single transaction in the block and every block is dependent on the block that came before it, therefore the term Block Chain. So, the block is completely transparent and that ledger is out there for everybody to see. Now the interesting part about it is that your Bitcoin account better known as a Bitcoin wallet is just associated with a long string of characters. With each bit Bitcoin wallet there does not need to be any reference to any specific person, entity, corporation or what have you? So, that’s what makes the Bitcoin anonymous. So, even though the Block Chain is completely transparent and verifiable the sender and receiver are just a long chain of numbers that wouldn’t mean anything to anybody and therefore it’s anonymous.
Ok, so we’ve talked a lot about using Bitcoin as a currency but what about using Bitcoin as an investment vehicle? Bitcoin as of what, the 9th of January 2018 is trading at right around $14,600 in change and you can see by this graph that goes back one month that it has been as high as $19,700 and as low as $12,500, so very volatile. If we go back a little bit more in time you can see that if you had gotten in in October you could have gotten it for $5,707 seven and if you really really want to get sick, if you had gotten in as recently as a year ago you could have gotten Bitcoin $249 and as you can see the exponential jump just in the last couple of months.
Ok, so we’ve got a lot of charts and exciting colors here in front of us right now. I’m going to wrap up the what is Bitcoin video for now but video 2 I’m going to show you the easiest way to get you some Bitcoin. We’re also going to talk a little bit about some other cryptocurrency and I’m going to dedicate a video 3 to Ripple. You can get Ripple right now for right around $2.10 as opposed to Bitcoin for $14,545 right now. And by the way you don’t have to buy a full Bitcoin, you can buy a fraction of a Bitcoin, you can buy $100 worth of a Bitcoin, you can buy $50 worth of a Bitcoin so you still can buy in fraction amounts and then still benefit you know obviously if it goes up and you know it might go up might go down. But anyhow, I’m going to wrap it up for now. Please like, subscribe, comment, I do not purport to be a “know it all” in the wonderful world of cryptocurrency as a matter of facts I just got in 6 months ago myself, I’ve got a lot to learn myself. I have had a ton of fun with it, I thought would share what I’ve learned so far hopefully in a way that will help particularly beginners. So, I’ll see you in the next video.