Hey, I've put together a basic article explaining what Bitcoin is. Before publishing I want to see what the community has for feedback so I can make adjustments from there. The purpose of the article is to introduce newcomers to Bitcoin, so it's meant to be clear and reader friendly. Let me know what you think. Be brutally honest because the harsher your feedback is, the better I'll be able to improve the article.
When finished the article will be published on my website:
www.CryptoWorldwide.com where I'll be dedicating a page to newcomers to crypto. I appreciate you taking the time to look this over and hope you have a nice day!
Here is a copy:
What is Bitcoin?Bitcoin is a cryptocurrency created in 2008 by Satoshi Nakamoto. Bitcoin can be thought of as a response to the Global Financial Crisis of 2008. It is a peer-to-peer decentralized digital currency, meaning there is no need for a trusted third-party to intermediate between transfers. For example, I can send bitcoins directly to you without any third-party interference. This power in the hands of individuals is unprecedented. For the first time in history, people all over the world can transfer value across the world without the need for permission. Further, governments and banks have no power to devalue the bitcoin currency because it’s based on mathematics, which only allow 21 million bitcoins to ever come into existence. Once the public realizes the implications of a currency that deflates over time, cannot be inflated, and can be transferred anywhere in the world without limits by governments, Bitcoin and other cryptocurrencies will explode in value.
Bitcoin is relatively new, and so, it is still widely unknown and many of the people that have heard of Bitcoin, heard about it as some internet money that criminals used to buy drugs on the underground black market, The Silk Road. Others heard about Bitcoin as this internet money that disappeared from an exchange site called Mt.Gox. On those grounds, it’s easy to understand why people dismiss Bitcoin as a scam or internet funny money, but I would encourage you to look passed the controversy and learn about what makes Bitcoin a revolutionary financial instrument.
Bitcoin is a trust-less payment system. This is not to be confused with untrustworthy, trust-less simply means there is no need for trusting in a third party for storing or transferring your funds, i.e. banks. You can store your bitcoins in a digital wallet on your computer or phone, or store them offline on a paper wallet. You receive funds using a public address generated by your digital wallet or given to you when you create a paper wallet. Your public address can be shown to anyone and all that it can be used for is depositing bitcoins to your wallet and searching it on the blockchain to view transactions. More on the blockchain later. To spend your bitcoins you use what’s called a private key which you should always keep stored safely and never share with others. A paper wallet is basically a generated public and private key that you store offline, so bitcoins sent to the address are on the Bitcoin network, but can only be spent when you use your private key. Thus, you are essentially your own bank with Bitcoin, and with that comes responsibility. For instance, if you lose your private key and have no way of finding it again, your bitcoins are lost forever, making that original maximum of 21 million bitcoins slightly lesser which slightly increases the value of the rest of Bitcoin users. Lost bitcoins can be considered a donation spread out evenly to the people who use Bitcoin.
When you spend your bitcoins, the network has to confirm the transactions and because Bitcoin has no third party authority, miners carry out the task of confirming transactions to prevent double spending. A miner is someone using a computer to do work on the network in an attempt to find the solution to mathematical problems. The work done helps validate transactions across the network, but cost time and electricity for the miner, so if they successfully solve the math problem, they earn a reward. Miners originally earned 50 bitcoins for every solution their computer finds. The Bitcoin protocol halves this reward every 4 years, so now miners receive 25 bitcoins for finding the solution. At the time of writing this, 25 bitcoins are worth approximately $7000 USD. Now, before you get too excited, mining has come alone way since the early days of Bitcoin and now it takes super complex and expensive equipment to compete with other miners because the more miners there are mining bitcoin, the more difficult it becomes to find the solution to the math problems. However, by pooling resources together, smaller miners can earn profits with their mining equipment, so if you are interested, here is a link to how to get started with mining Bitcoin.
https://www.bitcoinmining.com/getting-started/ What was this blockchain thing mentioned earlier? The blockchain is a public ledger that records all Bitcoin transactions. This technology has implications far-reaching and beyond Bitcoin because now we can use the blockchain in business, banking, and government as a decentralized public accounting system that is entirely transparent. This could be used to track all of government spending, for example, which has been a problem for some time in that when power is concentrated in few people’s hands, incentive for corruption is strong enough to cause even seemingly good people to slip from time to time. Government corruption would all be exposed on the blockchain for the public to see, so the incentive for corruption is greatly diminished, if not, eradicated due to the consequences.
Hopefully now I’ve at least sparked your attention to Bitcoin in a way that will foster continued learning and usage of this brilliant technology. It’s uncertain where this technology will take us, but what is certain is that the financial revolution is here and whether you get left behind or not, Bitcoin is here to stay.
