Bitcoin Explained

I discovered Bitcoin earlier this year, 
by accident!
It took me a while to get my head around it at first, as it was a complete unknown entity to me. But I persevered as I  thought I should at least understand what it's all about.

I am not a tech person and so it really did take me a while to understand 'Bitcoin' what it is, what it does and what it means.

So this is what I found out...

• Bitcoin is a form of Digital Currency. 
• It is Decentralised, meaning there is no third party (i.e. Bank)  involvement in your Bitcoin transactions. 
• It is a  Peer to Peer transaction, person to person, basically like cash! But on the internet!! 
• Unlike cash, there will only ever be a maximum of 21 Million Bitcoins created.
• Bitcoins are created by Mining. People who mine have special equipment and are the ones responsible for confirming transactions on the Blockchain* and creating new Blocks** Anyone with an internet connection and the equipment can mine.

*Blockchain is the technology/platform that manages Bitcoin and other digital currency transactions. The Blockchain facilitates a lot more than just digital currencies, but that's for another post!

**Blocks  permanently record transaction data which needs to be confirmed by the miners, this is done by answering a mathematical problem. The first miner to do so is rewarded with creating the next new block on the Blockchain. With each new block created, so too are new bitcoins, which are paid to the successful miner, this is known as the proof of work system.

• You can purchase things on or off line in Bitcoin, you can as of December this year trade in Bitcoin futures.
• You can send money anywhere in the world to anyone with a Bitcoin Wallet instantly with low transaction fees and no third party involvement.
• You can be your own bank! It means that the need for conventional banking could become instinct! People are trusting them less and less and the rise of Bitcoin and other digital currencies will most definitely be a game changer from what I understand so far...!

So where did it come from?

This is one of the many intriguing things about Bitcoin, the person or group that created Bitcoin are unknown and go under the pseudonym Satoshi Nakamoto...

You can imagine, I'm just starting to understand said Bitcoin, only to discover the whole thing is shrouded in mystery from the very beginning.

The year is 2008 and the world has gone through a global financial crisis, this was the setting for the birth of Bitcoin.

In November 2008 a link to a paper by Satoshi Nakamoto entitled Bitcoin: A Peer to Peer Electronic Cash System was posted online.

The paper explained the methods of using a peer to peer network to generate 'A system for electronic transactions without relying on trust'
Then at the beginning of 2009 Satoshi Nakamoto mined the first block of Bitcoins. This block is known as the Genesis block.
Bitcoin has grown from strength to strength since then, gaining attention and adoption all over the world. Many other digital currencies have been created ever since, with ICO's (Initial Coin Offerings) popping up daily.
There are even Bitcoin ATM's where you can exchange your 'Fiat' (Pounds, Dollars etc) into Bitcoin.

What you have been reading is my understanding of Bitcoin so far. I have learnt and researched more but I want to be able to absorb it all and then explain it to you in a non tech way!

I hope that this post has helped you to understand Bitcoin a little more and as promised, there will be other posts on the Blockchain and other more in depth explanations of how it all works.

To summerise...

Bitcoin is a digital currency that can be used all over the world. It is decentralised and works on a peer to peer (person to person) system. It has grown in popularity since the first Bitcoin was mined in 2009. You hold Bitcoin in a digital wallet, much like a physical wallet. You can exchange Bitcoin both on and off line.
Bitcoin and other digital currencies seem to be the way forward. I believe that it is extremely important to understand the basics of this new technology as I think it will be the future!

Thank you for reading.
Bitcoin Unicorn
xoxo

'Bitcoin is a remarkable cryptographic achievement... The ability to create something which is not duplicable in the digital world has enormous value... Lots of people will build businesses on top of that' Eric Schmidt, Executive Chairman of Google
[Source Newsbtc.com]