Bitcoin.. you can’t stop hearing it everywhere, but you still don’t understand what Bitcoin is? Don’t worry, you’re in the right place!
Bitcoin in a few words
Bitcoin, in essence, is money, but a new form of digital money. It is a digital form of money that allows you to make secure, cheap, rapid, and free payments from around the world.
To put ourselves in perspective:
- Bitcoin is a protocol, payment network, and a currency.
- Originally, the concept was proposed in 2008, but was launched in January of 2009 by Satoshi Nakamoto (see who is the creator of Bitcoin).
- At the end of 2016, it had more than 10 million users and 100,000 stores worldwide that accepted Bitcoin as a means of payment.
- Actually, there are more than a million new Bitcoin users every month.
- The Bitcoin network is the most secure network in the world, and by the end of 2016 it was already processing more than 300,000 daily transactions.
It’s design is so revolutionary that, in only a few years, it is turning the financial system as we know it upside down, completely displacing banks, credit cards, SEPA, SWIFT, and central banks.
It’s free, available for everyone, but above all it is decentralized and pays careful attention to your privacy. It is not controlled by any bank, government, or company. It is dependent on a network formed by people’s computers. A decentralized network, managed by its users. Put another way: there is no central bank that happily emits the money.
Bitcoin is not anonymous, but it does provide great privacy during the times of Bit Data and constant private information leak.
In the same way that email was an incredible advance when it comes to communicating, Bitcoin represents a giant step in terms of payment systems.
The analogy that best illustrates the nature and potential of Bitcoin is that “Bitcoin is to money what the internet is to information.” Bitcoin democratizes money, it is made by the people, and snatched from power.
The price of Bitcoin is determined by supply and demand.
Bitcoins are used through programs called wallets.
What makes Bitcoin special is not that it is a digital currency. The euro, dollar, or other currencies are also, largely digital, and are digital forms of money that have existed for decades. Almost all the money that exists is digital. It is not made special by reduced transaction costs, or speed of transactions.
These and other characteristics, eventually, will also end up being offered by banks. The main difference that makes Bitcoin magical, is that it is a P2P network: nobody issues the money. It separates politics and money. By understanding how money and central banks work, you can understand how Bitcoin frees humanity.
Your bitcoins are not files, there is not something specific that refers to a bitcoin. The approach is different. Bitcoin is the unit of account of the balance sheets that the blockchain manages. Each user has a key (a password) that manages an address (account number) in the blockchain (the core of Bitcoin, the distributed accounting book)
Refers to the transaction network; it can be used for all types of applications, bitcoins are sent in transactions and all transactions are stored pseudonymously in an account book called blockchain.
Bitcoin network account unit; there will never be more than 21 million units and they will be created during the next 100 years. Each bitcoin is divisible by 100 million units; its quotation fluctuates by supply and demand.
Public and distributed accounts book (ledger) where all bitcoin transactions ( and their balances) are stored permanently. Thanks to “mining”, blockchain is known as the safest and most truthful database in existence.
Process by which transactions in the Bitcoin network are verified; for this purpose, advanced cryptography and specialized hardware (“miners”) techniques are used: a fixed number of bitcoins are created (“mined”) during the process ( see What is mining bitcoins)
You will begin to understand Bitcoin as an additional cultural change. Bitcoin is the clear example of how, in a coordinated way, humanity can solve problems on a global scale without relying on third parties.
Bitcoin eliminates barriers. As in other cases, building walls is useless, whether it be in Melilla or Mexico…. you have to build bridges. It’s the same for money. Bitcoin is not hiding money or avoiding paying taxes that improve society. Bitcoin breaks boundaries, builds bridges, and unites people. Everything is equal on this planet.
However, in order to understand what Bitcoin is in detail and to determine why it is the best money that exists, it is not enough to stay here. There is much more that you should know and we have separated it into different chapters so that you can become an expert in an enjoyable way.
Throughout the entire Bit2Me Guide (soon in english) you will see everything mentioned above in detail and you will discover the advantages of Bitcoin.