This introduction to Bitcoin Brief aims to prime non-bitcoiners for the rest of the content on the channel.
Transcript: Bitcoin brief will keep you up to date with the latest Bitcoin news from a UK perspective.
Who’s the audience?
The briefs will be aimed at people who already know a bunch about bitcoin, but want a quick digest to keep them in the loop; without having to check reddit every waking hour.
If you don’t know anything about Bitcoin, that’s okay. This first episode will get you up to speed. If you already know your stuff – you can move on to the next video. I’m here to save you time, not waste it.
Forget everything you’ve been told about Bitcoin – it is likely inaccurate. The mainstream media, government, and banking establishment have an incentive to report on Bitcoin with a negative bias. It would be like the Cocacola Company doing a news report on Pepsi. Obviously Coke are going to do everything in their power to make sure you associate Pepsi with sex work, drugs, and terrorism.
So why doesn’t the establishment like Bitcoin?
Bitcoin is a revolutionary invention. It has solved a computer science problem which would allow us to do away with centrally controlled money.
So if Bitcoin were to gain mainstream adoption, we would have a free economy, which would leave the banks and governments of the world holding the reins to a dead horse.
If the central bank and government no longer control the money, then the crony capitalists no longer have any chums in high places, and have to play fair like everyone else. It would be like a backdoor revolution. No guns, no rioting, just a slow steady transition to a free economy. That’s why you’ll never hear about how great bitcoin is from the establishment.
Much like the protocol which the internet uses, TCP/IP, not everyone needs to know how the Bitcoin protocol works. If you must know – watch this.
I hope most of you will be happy to accept that it does what it’s designed to do based on the fact that hundreds of millions of pounds of investments have been made into Bitcoin companies in the last year alone.
In simple terms, Bitcoin involves a list of transactions which is copied across every computer in the bitcoin network. New transactions are broadcast to the network and checked by each computer against the current list to make sure no one spends money they don’t have. This checking process is rewarded every ten minutes with payment in newly created money, as well as any transaction fees. The reward is only given to one computer every ten minutes; the fastest one. Right this second there are huge computer clusters all over the world, competing to earn these rewards, and securing the network in the process.
To send a bitcoin to you, I have to broadcast a transaction from me to you. If I tried to send the same bitcoin to someone else later, the transaction would be rejected by the checking computers because the transaction list would say I’ve already sent it to you. The beauty of this, is that it doesn’t require a bank. In fact, it doesn’t require any third party whatsoever. So long as there are computers running Bitcoin software somewhere in the world, bitcoin will work autonomously, as it has since 2009.
Now you know roughly how it works, I’ll introduce you to the language of bitcoin: The list of transactions is called the Blockchain. New transactions are stored in ten minute blocks, so the newly created money is called a block reward, or coinbase transaction. The checking computers are called miners. A transaction fees can also be referred to as a miner’s fee.
So we know the blockchain stores transactions. How do we know how much bitcoin each person owns? Essentially, all we need to keep track of is how much money we’ve received, and how much we’ve sent. The sum total of every transaction will tell us how much we have. Rather than working this out from scratch every time we want to find out, we use a Bitcoin Wallet. Bitcoin gets sent between addresses, and a wallet will keep track of which addresses belong to you. Wallets can be in the form of a computer program, a smartphone app, a piece of paper with some numbers on it, or even just as a passphrase you remember. If you have your own wallet, you are in charge of the security of your money. If you can’t trust yourself with that kind of responsibility, then there are plenty companies who have set up to help you store bitcoin securely, whilst keeping easy access when you need it.