Easy way to explain bitcoin

[remotemass]

Easy way to explain bitcoin

Bitcoin is like digital cash, or like digital gold.
You need an internet connection to use it.
The bitcoin network only records transactions that take place.
Bitcoin enters circulation given as rewards to people that confirm transactions and secure the network. These people are called miners of bitcoin.
Looking at all transactions that took place the software can say how much bitcoin balance your bitcoin address is associated with.
Bitcoins have no physical existence other than the record of transactions that exists in the cloud, replicated to all computers using the software. They only exist as those balances the software knows you have associated with your bitcoin address, in your digital wallet.
Your BitCoin wallet is a file, called "wallet.dat";
It is located at: C:\Users\YourUserName\Appdata\Roaming\BitCoin (Vista and 7)
It is in that file that you store your password keys. They are called the private keys. It is that what you keep and need to always have in a safe place.
You can print your private key.
The private key is mathematically related to the Bitcoin address, and is designed so that the Bitcoin address can be calculated from the private key, but importantly, the same cannot be done in reverse.
You can use bitaddress.org to create (find out) the bitcoin address of a random private key and print out that key pair, so that you can always send bitcoin money to the public key bitcoin address and keep the private key safe.

Every 10 minutes or so, a new block of transactions is added to the record of
all transactions (called the blockchain).
That gives a reward to the lucky miner that was able to find the computational solution for a valid block to be processed.
The reward started to be 50 BTC every ten minutes. But every four years the reward halves.
Right now it is 25 BTC every 10 minutes and from 2016 till 2020 it will 12.5 BTC every 10 minutes, and so on till we have 20 million BTC in 2027, when Bitcoin becomes adult (95% of the theoretical limit of 21 million BTC).

Instead of kilograms of bitcoin, BTC is used.
One BTC can be divided in up to eight decimal places making the total number of units that will ever be in circulation:
21 million * 100,000,000 = 2.1 quadrilion (satoshis)

Bitcoin is a new kind of money that makes it possible for a complete separation of money and State. It is the end of inflationary policies and also the end of the fractional banking system.

"The problem with fractional banking system is that it allows for a positive feedback mechanism with asset prices. People often borrow (create) money to purchase non-productive assets in the hope that they can sell that asset at a higher price at a later time. But of course the more money is created to purchase an asset, the higher the price of that asset will rise.
This self fulfilling prophesy encourages more people to do the same, and a bubble ensues. Asset price bubbles are an inevitable consequence of our monetary system."
(http://www.fullreservebanking.com/fractionalreservebanking.htm)

Bitcoin has lots of advantages and is just a matter of time for it to completely change the paradigm of money in everyone's life.

[Booth]

you should make a video explanation
I doubt anyone that is new to all this bitcoin subject would read this much text

[Kprawn]

It's also a decentralized P2P network, with no central bank or organization running the show.

People use digital wallets to access the blockchain/ledger and they have total control over their own money.

Currency can be send anywhere around the world, with nearly no fees. {Less than any other method, currently in existence}

You can email the currency to someone else and you create your own wallets. {No bank queue or waiting}

The currency can be safely stored on a piece of paper, called a paper wallet. 

[annonymous22]

i love BTC!

[Miracal]

I don't think the new comers will be patient to read through this tedious lengthly artical. It is better to put it in picture or animation flash to attract their interest at bitcoin.

[franky1]

simply layman real life description of bitcoin.

bitcoin is like an electronic cheque.

theres a 'To:' address, and it also contains where the funds are coming from. instead of a central banks. the payment movement is done decentralised, by anyone interested in helping out. once cleared, the transaction lists are distributed to everyone and a consensus is made about how valid a transaction is because everyones copy is the same. any manipulation by a single party is simply ignored by others.

if you want more details of how its secured read on:

those participating in the clearing, bunch together the cheques into bundles every 10 minutes on average and ensure that each transaction is valid with confirmed funds available, and then the bundle as a whole is then signed off using a complicated maths puzzle to ensure it cant be easily messed with afterwards and then distributed to everyone. anyone clearing cheques gets a slice of a reward dependant on how much work they put into clearing the cheques.

now replace the words
cheque -> bitcoin transactions
clear -> min
house -> rig
bundle ->block

and you will get:

those participating in the mining, bunch together the bitcoin transactions into blocks every 10 minutes on average and ensure that each transaction is valid with confirmed funds available, and then the block as a whole is then signed off using a complicated maths puzzle to ensure it cant be easily messed with afterwards and then distributed to everyone. anyone mining bitcoin transactions gets a slice of a reward dependent on how much work they put into mining the bitcoin transactions.

now you have grasped the laymans version. read the bitcoin white paper if you want the technical version

[remotemass]

you should make a video explanation
I doubt anyone that is new to all this bitcoin subject would read this much text

I did a video. Search on youtube for: United Colors of Bitcoin
It was my production.

[Willisius]

The more easy-to-understand an explanation of Bitcoin is, the less accurate it will be. Explaining things entails relating them to something the listener already understands, and there's not really anything like Bitcoin that people already get.

[foxkyu]

i think the easiest way to explain bitcoin is give them some of bitcoin
so they can spend the bitcoin for shoping or any others
if they like it, they will spread the word about it
i'm sure of it

[p2pbucks]

I think it's still too hard for newbies . My personal opinion : we need a few sentences to interest newbies in bitcoin not a long preach .  It is not needed to explain the tech details first time.

[remotemass]

I think you could publish such in a newspaper and it would enlighten many people.

[TwoCoins1Purse]

I always explain it like this:

Bitcoin is simply a virtual unit that is impossible to counterfeit and has a finite total of only 21 million in existence.
The creation of this finite unit supply is controlled by mathematics, not people. And the mathematical framework also acts as the actual payment network.

It is because of these characteristics Bitcoin emulates all of the properties of money used in trade.

But what makes it so special is that it is 100% politically neutral. No government can control it, shut it down, or manipulate its supply thus, Bitcoin's value is determined completely by the free market making it the best and fairest form of money in the world.