Bitcoin is a decentralized platform of trust with which money is the first application built upon it.
What is Bitcoin?
Every single one of us has gotten that question at least once. Chances are we didn’t explain it very well, left the other side confused, and convinced them that Bitcoin is a joke. Hopefully, this article can answer that question for you.
In learning what Bitcoin is, take yourself all the way back to when you first got introduced to the cryptocurrency and try and relearn what you may already know. Starting from basics is imperative in learning this confusing, complex subject.
Bitcoin was started January 3, 2009 by the anonymous Satoshi Nakamoto when he mined the first coins. Before the first coins were mined, he published the Bitcoin Whitepaper which is a 9 page document that fully explains what Bitcoin is. While at first glance it appears to be just a fully digital form of money, that is only the beginning.
Bitcoin isn’t what it appears to be. “Bitcoin isn’t a company, it isn’t a stock, it isn’t something you need permission to sign up for. It is a decentralized trustless platform where money is the first application.”
This poses a very important question that most of us have probably never thought about, “What is money?”
What is Money?
All money is, is a language that we use to communicate the concept of value to others. Money can be anything. It can be shells, precious rocks, minerals, beads, feathers, coins, paper bills with someone’s face on it, plastic cards with a company’s name on it, Pokemon cards, anything.
Money is a technology created by humans so we can exchange something we have for something we want. The reason money exists is because when trading, one side doesn’t always want what the other side has. But if they can exchange something universal, a.k.a. money, then each side will always have something that the other side wants.
Throughout time our idea of money has changed many times but there has always been the issue of storage.
In the banking world, a centralized party holds responsibility for holding your money. Your money can be seized/frozen, you get told how much you can take out, what time you can access it, where you can send it, and your transactions can be censored and stopped. Bitcoin allows for total control over one’s money. Your Bitcoin can never be seized/frozen, the network runs 24/7 (weekends and holidays too), can be sent worldwide, and your transactions can never be censored or stopped.
How Many People Use Banks?
In our world there roughly 7.7 billion people. Of that number an estimated 1.7 billion people, 1 in every 4 people, don’t have banking access at all. Of those 5 billion people with banking access, a much smaller number has the ability to commerce internationally. With Bitcoin, everyone instantly has access to 7.7 billion people in the world. Not just those in your country, or those in your region, everyone. Chances are those without a bank account now will never have a bank account but that is ok because Bitcoin allows us to become our own bank. By controlling your own money, Bitcoin, you are your own bank.
Unlike banks, Bitcoin doesn’t see borders, it doesn’t see nationality, and it doesn’t even see if the end user is human or not. Bitcoin can be owned by machines or a program the exact same way you or I can.
Bitcoin is Just Like the Early Internet
Just like when the internet was created, there is tremendous push back from governments, institutions, and people who don’t want/care to see the value Bitcoin can bring. Before the internet was mainstream, it was crazy to think that anyone could post their own ideas and thoughts for everyone to see.
Also, much like the early internet, Bitcoin isn’t very user friendly and that’s ok for now. The internet probably never would have gained as much traction as it has without the creation of domain names.
If you aren’t familiar, a domain name (Google.com, YouTube.com, etc…) is used to identify one or more IP addresses. Before the creation of domain names, if you wanted to search for a website you needed to know the entire IP address, which is just a string of numbers. Here is one of the IP addresses used for Google.com, 220.127.116.11. There are any others and depending on the time, Google can choose which IP address to use.
Going back to the point, as a user, which is easier for a users to remember and use on a day to day basis? Clearly the domain name is much easier, Bitcoin, like the early internet, needs to become more user friendly.
Bitcoin is the first form of money that isn’t controlled by any entity because of its decentralized, trustless nature. What the internet did with communication, Bitcoin is doing with money.
Bitcoin allows for the change from government issued money to network issued money just like the internet allowed for the change from institution based communication to a communication that allows for choice. I can choose to get my news from BBC or from my favorite YouTube channel and whether that news is right, wrong, biased, or not, that isn’t the point. The point is that we all have choice and that is what Bitcoin is about.
In the words of Andreas Antonopoulos, “Bitcoin isn’t just money and if that is all you see, then you are missing the point. It is a decentralized trustless platform that allows for the transfer of value across the world. Money is just the first application.”
This article was written based on a video Andreas Antonopoulos did called “Introduction to Bitcoin.” He is extremely knowledgeable and if you wish to learn more about Bitcoin, please go to his YouTube channel, he is a great resource.
I hope this article helps you understand what Bitcoin is and helps you to explain it to others who are new to this technology.