What is Bitcoin?

Bitcoin is a type of digital money and/or store of value, often referred to as “cryptocurrency.” Unlike traditional assets like dollars, euros, or even real estate, Bitcoin is not controlled by governments, banks, or institutions (a good thing, now value can truly be yours). Instead, it operates on a decentralized system that uses cryptography and a public ledger to ensure security, fairness, and transparency; very important benefits that have been neglected by the traditional finance world.

How Does Bitcoin Work?

Bitcoin runs on a technology called blockchain; a fancy database. Imagine blockchain as a world-wide, digital ledger that records every-single Bitcoin transaction ever made before and any transaction that will be made. This ledger is distributed across millions of computers, phones and essentially anything that can be connected/or not to the internet worldwide, making it virtually tamper-proof (aka, the people’s network). When you send Bitcoin, the transaction is verified by a decentralized network of computers, known as miners. Once validated, the transaction is added permanently to the blockchain.

Why Was Bitcoin Created?

Quite the mystery, Bitcoin was introduced in 2009 by an unknown individual or group or – well we don’t really know; using the alias Satoshi Nakamoto. It was designed as a response to the many many flaws in the traditional financial system; issues like lack of transparency, corruption, and control by central authorities. Bitcoin enables people to transfer value directly to one another without relying on banks or payment processors. This reduces fees, enhances privacy, and most importantly, empowers individuals; the people.

Key Features of Bitcoin

Decentralization: No single entity can control or manipulate Bitcoin, unlike its predecessors of the traditional finance world.
Limited Supply: Only 21 million Bitcoins or 2,100,000,000,000,000 sats (think of as the cents of Bitcoin) will ever exist, which is a driver to its scarcity and long-term value.
Transparency: Every transaction is engrained on to the blockchain and accessible for everyone's public viewing.
Security: Cryptographic hashing safeguards transactions and user wallets.

How Do People Use Bitcoin?

Payments: A growing number of businesses accept Bitcoin for goods and services.
Investment: Many people hold Bitcoin as they see it as a hedge against inflation and a much superior store of value.
Remittances: Bitcoin offers a fast*, low-cost* way to send money/value internationally without the restrictions that are commonly imposed by traditional systems.

Fast and Low-cost does not exactly apply for a transfer of 1 dollar, but more so something of more high value.

Is Bitcoin Safe?

Bitcoin’s technology is very robust and very secure, but if viewed as an “investment” or financial tool, it comes with risks. The price of Bitcoin is highly volatile, which means its value can fluctuate rapidly. Additionally, Bitcoin transactions are irreversible, so users must store their private keys securely and use trusted wallets.

Bitcoin isn’t just digital money or magic internet money, it's a revolutionary concept challenging the norms of traditional finance. It empowers individuals; the people, removes unnecessary middlemen, provides a level of value freedom and control never experienced through out history. Understanding Bitcoin is the first step to embracing a more open, fair, and innovative financial future. As Satoshi famously said; "If you don't believe me or don't get it, I don't have time to try to convince you, sorry."

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