I'm a cryptography nerd but i just don't understand what is so special about bitcoin. care to feel me in? i saw on the news yesterday that Overstock was accepting bitcoins now, so it must be pretty special?
Tell me the truth, is it legit or is it just another "false sense of security" like paypal and debit cards.
The concept of a "crypto-currency" using verifiable digital signatures to transfer control of representation of value has been around for quite a while. Unfortunately, until the year 2008, nobody had implemented a method to prevent double-spend without a centralized clearing-house. This centralized clearing house was a weak point in the system and acted as a single point of failure. If the clearing house ceased to exist, the currency stopped functioning.
Bitcoin was the first successful implementation of a decentralized way for the entire economy to agree on the order and validity of any particular transaction. It is a shared consensus system that is designed to be trustless and decentralized. As such, there is no "clearing house" that the users have to depend on. The creator of Bitcoin made some economic decisions in the design that may (or may not) be excellent for longevity. Some of these decisions involve the method that the currency is put into circulation and the inflation rate of the currency supply. Only time will tell if these were successful decisions or not, though after 5 years of continued use it certainly seems that there is room for optimism.
