Introduction
For most people, understanding Bitcoin can be a very difficult task. It encompasses very complex economic and computer science theories and topics, but have no fear! The resources available on BitcoinerSupport.com will help guide you on your journey down the Bitcoin “Rabbit-hole.” How far you go is completely up to you. The following 90 second video gives a great overview of Bitcoin, and is a great way to start your journey.
Overview
Put simply, Bitcoin is a new type of digital money that is built on the internet. It is both a scarce digital store of value AND a currency that is border-less, censorship-resistant, free from government or private entity control, and it has a very unique monetary policy. Bitcoin is also a peer-to-peer payment network that facilitates the secure transfer of Bitcoin from one person to another, without the need of a trusted third party. The Bitcoin payment network allows you to send any amount of money to anyone in the world over the internet in minutes. Unlike traditional money in your existing bank accounts, Bitcoin does not have transfer limitations, long waiting periods, date/time restrictions, and accounts cannot be frozen.
The fact that Bitcoin is a digital currency is not necessarily what makes it unique. Dollars, Euros, and other fiat currencies are also digital and can be transferred across the world (through third parties, with restrictions). What makes Bitcoin truly unique is its monetary policy. Unlike traditional fiat currencies, Bitcoin cannot be created out of thin air. Today in our fiat currency system, central banks have the authority to print new currency as needed, without limitation. Large scale and irresponsible money printing has historically lead to inflation and the devaluation of the currencies. Bitcoin on the other-hand, has a strict monetary policy. There will only ever be 21 million bitcoins created…ever…..and this makes Bitcoin a scarce digital asset, essentially a digital gold.
Decentralization
How does Bitcoin achieve decentralization? The first step in Bitcoin’s decentralization is the fact that it is open-source software. Anyone can download and run the Bitcoin software over the internet, and use it to help validate Bitcoin transactions. This transaction validation software, also called a “NODE,” ensures that individuals do not “double spend” their Bitcoins, and that the entire distributed network reaches consensus. Every transaction that is ever processed on the Bitcoin software is recorded in a public distributed ledger called a “Blockchain.” Every node that runs the Bitcoin protocol (software) downloads and stores the entire blockchain history, and validates all of the new transactions that are created by a process called Mining.
Mining
So what exactly is Mining? Bitcoins today are created through a process called mining, in which anyone with the knowledge and the means can participate. Miners use the computational power of specialized computer hardware (known as ASICS) to process transactions on the Bitcoin network. For this computational work, miners are awarded a certain amount of Bitcoin (called the “block reward”) as well as a small transaction fee. In the early days of Bitcoin, miners could simply use their laptops to process transactions since the network was relatively small. Today, a very powerful computational microchip called an Application Specific Integrated Circuit (ASICS) is required to profitably mine Bitcoin. It is important to note that the block reward decreases by half approximately every 4 years (known as “The Halving”), so less and less bitcoin are released in circulation over time. By the year 2140, all Bitcoins will be mined, and miners will be compensated solely by transaction fees.
Other Bitcoin Introductory Videos
In this 37 minute lecture, Andreas Antonopoulos introduces Bitcoin and explains some of the foundational concepts from a technical perspective.
Other “What is Bitcoin” Resources
- “Tell Me About Bitcoin”
This is a one page Bitcoin overview by Preston Pysh, Presented by SwanBitcoin.com. Preston Pysh is a co-host of “The Investors Podcast,” and advisor to SwanBitcoin.com, a popular platform for accumulating Bitcoin over time with automatic recurring purchases. - What is Bitcoin? By Casebitcoin.com
CaseBitcoin.com focuses on the basics of Bitcoin in this succinct overview outlining:- What is Bitcoin?
- How Bitcoin is Different
- Why Bitcoin Matters
- Bitcoin 101 By CoinDesk.com
CoinDesk provides a short course on Bitcoin Basics in this article including:- What is Bitcoin?
- How Can I Buy Bitcoin?
- Why Use Bitcoin?
- How to Store Your Bitcoin
- How to Sell Bitcoin
- And Many Other Topics
- Bitcoin Need to Knows from Bitcoin.org
- Bitcoin Overview Video from RT News