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March 23, 2013, 12:14:53 AM |
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I've been meaning to have a crack at this for a while, so here is my elevator pitch: (If you exclude the optional last paragraph of hyperbole it runs to 60 seconds out loud.)
Bitcoin is a digital currency that's managed by a software network instead of by government. A network of volunteers donate computer power to verify and store transactions between anonymous accounts. Anyone can click a button and make as many new accounts as they wish, but to fill any with bitcoin you need to first buy them from a currency broker and have them transfered.
New bitcoins are created as a reward to the computer in the network that is the first to verify and sign all the transactions from the preceding ten minutes. This reward however, drops over time; creating a fixed total number of bitcoins in the future. This process is now competitive enough that to remain profitable after electricity costs, it requires specialist computer hardware. But you needn't worry if you simply want to buy and spend them as a user, you just need to download the wallet software or sign up to a free online service.
What gives bitcoins value is a combination of their low cost of transfer, scarcity, anonymity and the resilient design of the network. Once under your control, nobody without your password can either confiscate your bitcoins, prevent you from spending them, or more often even know that you ever had any in the first place.
Lending will always play a role in society, but bitcoin has the potential to completely replace the everyday utility role of banks and companies like Visa, Paypal and Western Union; all while curing the world of inflation, forever! A global internet requires a global currency and in 2009 it finally got one; bitcoin has been growing steadily ever since.
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