Basics of bitcoin


This bitcoin animation tells you the basics of bitcoin and why we think it’s such an important innovation!
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Transcript:

Bitcoin is the first decentralized monetary system, which is hosted on the web by regular people.

It’s based on an open source computer program that hundreds of thousands of people are running on their computers. These computers, often specifically built for bitcoins, are executing challenging cryptographic calculations by which a public ledger of all the bitcoin transactions is kept.

Bitcoin removes the need to use third parties, like banks or credit card companies, in monetary transactions. That means not only cheaper and faster payments, but also more financial freedom as governments or banks can’t freeze the funds of citizens for political or other reasons.

The number of bitcoins has been limited from the beginning so that there can never be more than 21 million bitcoins. As a result, many believe the value of bitcoins will rise when more and more people start using them. Bitcoin has indeed been possibly the best investment of the year because it’s value has gone up thousands of percents. Bitcoin has also become the most valuable currency in the world in just a few years.

When traditional central banks print large amounts of euros and dollars, inflation occurs in which the value of existing money decreases year by year and the prices in shops keep getting higher and higher. Bitcoin on the other hand is practically a deflationary currency. Deflation constantly increases the value of money, thus discouraging unnecessary consumption and the taking on of debt, whilst encouraging saving. The longer you can wait with your purchase, the less bitcoins it is likely to cost you.

Most people would rather teach their children to save money for purchases instead of using large amounts of credit. It is common sense to prefer a monetary system which rewards saving instead of debt.

There are three different ways of getting bitcoins:
-You can buy them from bitcoin exchanges and directly from other people
-You can exchange them for goods and services
-Or you can mine them yourself with a computer

It’s worth mentioning that mining has become more and more intense because of the huge growth in miners and improvements in their hardware. That has led to bitcoin network becoming the most powerful computer network in the entire world, which makes attacking it very difficult.

Many people believe that bitcoin is about to disrupt the monetary system in a similar fashion to how email changed the way we communicate. It’s a technological masterpiece and a demonstration of how smart technology can solve problems that once appeared impossible to solve.

You shouldn’t simply believe this video though, because that wouldn’t be smart. Read more about bitcoin in Wikipedia and other sources and study the system carefully yourself. Many people that have started out skeptical have been surprised by how brilliant the bitcoin system is.

Bitcoin is more than just a superb way of transferring money and storing value. It’s a new kind of protocol for storing distributed information in a reliable manner. It’s the thought of having a transparent monetary system based on pure mathematics instead of politicians and bankers.

Bitcoin is about to change the world, because it’s an idea whose time has come.

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