What is Bitcoin?: What’s The Appeal?
NB: This is written to be as simple as possible and will obviously miss out a tonne of details. #hussar
If you’re sitting there wondering not only what the massive fuss is about bitcoin, why everyone has gone mental for bitcoin? I will now explain it in as simple a way possible:
Bitcoin is a form of online currency. Aha you might think, but how is that different from every other currency in the world. Be that US Dollars or Pounds Sterling, Czech Krona or the worthless nonsense Zimbabwe prints.
The Blockchain system which is the basis of Bitcoin was created by a man, group or alien going by the name of Satoshi Nakamoto. Now to avoid being in the nerd world of crytographic currency we will whizz over the history and just look at it for what it is.
As of December 7 2017 there is 16.73 million bitcoins in the world. Bitcoin are mined and by a process of mega mathematics which include things called nonces and nodes (complicated computer mathematics terminology) its bloody difficult to create and takes a lot of time and computing power. This means they can’t simply be printed willy-nilly (a bit like gold).
Now unlike money or gold, bitcoin is not owned or controlled by a central service (e.g: Bank of England). You can’t just manipulate the value of bitcoin to suit a political objective. The limits on mining i.e: creating bitcoin, is due to stop when it hits 21 million bitcoins in circulation which would be the year 2141. Some people don’t even think it will get so far as its so hard to create. But as long as more people buy bitcoin and transact with it the value of one bitcoin will increase.
That’s sort of the theory anyway.
So as long as there is demand, the value should increase. As long as the demand is greater than the process of mining them, until they are all built that is.
So demand is based on whether it is better than money, which technically it is, partly due to simplicity of how we determine its value (banks can’t just print more) and its ability to move around the world (remember we took up cash as moving our gold to the next town on a cart was just stupid). So erm…Genius!
That ladies and gentlemen is Bitcoin!
Now what if this process of holding value as a currency (Bitcoin) could be used to literally hold other software and ideas as it is all just software subject to computer bytes. It wouldn’t be subject to interference by central banks and governments with a direct point of value, and more flexibility to change and alter ownership and attachment etc. That ladies and gentlemen is Ethereum, (put very simply) and that is a mega exciting concept for another blog.