If you feel a little clueless when it comes to cryptocurrency, you’re not alone. The sudden and stratospheric rise of bitcoin and its ilk is all a little dizzying and unreal.
So you probably have some questions: Is bitcoin the emperor’s new clothes, or is it the ermine shawl of future millionaires? When a single bitcoin can be worth $10,000, then how could you possibly spend it? How much would a pint of milk cost? And can you use your bitcoin to pay for, say, a weekend getaway?
We’re here to debunk the enigma and claim some clarity on this very 21st-century concept of money – money that, perhaps, doesn’t really exist… Except that it does.
Let’s unravel this, shall we?
Everything you ever wanted to know about bitcoin (but were afraid to ask)
What is cryptocurrency?
First, some definitions.
A cryptocurrency is an encrypted digital payment network. There are no physical notes or coins – it’s a currency that exists solely over an encrypted network of computers.
Are you still with me? Great.
Bitcoin was invented by a mysterious developer, known to the planet as Satoshi Nakamoto, which is a pseudonym. Nobody knows if it’s one person or a group. For ease, we’ll refer to Nakamoto as “they.”
Nakamoto wanted to create a currency that was not controlled by governments or corporations; which could be traded globally at no cost and without revealing one’s identity.
What is a bitcoin?
A bitcoin is a line of code with no physical tokens, a bit like your debit card. Once obtained, bitcoin are stored in a digital wallet, which is conceptually the same as a physical wallet. Bitcoin can be traded for services and goods, just like… well, money.
You may have heard the term “blockchain.” It’s an incredibly boring term, but you need to know it to properly understand bitcoin. Sorry.
What is a blockchain?
A blockchain is a ledger – a record of transactions.
Your bank keeps a ledger on you. It prevents you from “double-spending” – using the same units of currency twice. The blockchain is similar, only it is powered by a peer-to-peer network.
Tomorrow we will go into Peer to Peer (P2P) and more....
So maybe, you are familiar with Bitcoin, Blockchain et al, or maybe you are not. I will dedicate this week to Crypto Currencies and it's underlying technology.
Have a blessed week!!!
Have a blessed week!!!
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