Bitcoin: A beginner's guideTrying to understand the ins and outs of Bitcoin can be confusing. Sharon Profis explains what Bitcoin is, and why it's so popular right now.
When a large number of people are making huge profits from their relatively small investments, heads turn. In this case the drama is even greater because people around the world are making money off of another obscure form of money. Bitcoin. Bitcoin. Bitcoin Bitcoin Let's start with what it is. Bitcoin is a digital currency. It's completely intangible, so unlike dollars, there aren't any bills or coins. And Bitcoin transactions happen digitally, anonymously And without the help of any banks or middle men. You can already use it to book hotels, shop online, and some restaurants like Subway even accept BitCoin. So you're probably wondering how BitCoin gets printed or how you could send BitCoin without the help of a bank. For this you can thank Blockchain Technology. Let's talk about the Blockchain. When you Venmo your friends, there's a bank to oversee, approve, and log that transaction. The bank acts like a middleman that we've all entrusted to supervise our money. Banks can also charge you fees, freeze your account, and they can also be vulnerable to major data breaches. That just doesn't exist with BitCoin. Instead, BitCoin uses Blockchain technology. It's what allows us to cut out that middle man and send money directly to each other. So, instead of a bank monitoring every transaction, a network of computers are verifying every transaction Kinda like the way thousands of people monitor any given Wikipedia page to ensure its accuracy. Back to the Blockchain. In Blockchain, every new transaction comes in the form of a block that's permanently linked to the one before it. And it's connected to the next one and so on. So if a bad actor tried to tamper with one of these blocks It could destroy the entire chain. And many computers on the network, think about those Wikipedia editors would notice that something went wrong. And here's the BitCoin mining comes in. Lots of computers are. Working to maintain this network, approve transactions and hold the network accountable without the help of a middle man like a bank. It take a lot of computing energy to maintain this network of transactions and records so the network rewards the people to help keep it running, those are the BitCoin miners. So when a computer helps maintain the BitCoin network it receives a BitCoin in return. But there isn't an unlimited supply of BitCoin. Instead the BitCoin rule book states that there are just 21 million BitCoin available. And in part, it's that scarcity that drives the value of BitCoin. It's easy to get caught up in the excitement over BitCoin, but the real integration here is with Blockchain technology. It can be used for so much more than just verifying BitCoin transactions and other crypto currencies. Think about how we could cut out middlemen in many industries, and use it to verify health records, legal documents, and private securities. Bitcoin is really just the beginning. [BLANK_AUDIO]