You’ve probably been hearing a lot of hype these days about Bitcoin and the blockchain. That’s great! But do you understand it? If you’re like me you’ve probably been searching the web looking for a basic explanation of what it all is and why it’s important to you. Have you had any luck figuring it out? Probably not. Most articles and blogs do a decent job explaining what it is, but the problem comes from the use of jargon and complicated explanations. These are the things that make it difficult for the average human to really understand what they are talking about. Are you one of those people? Not a problem! We’ve watered it down so that everyone can understand it.
Why Did Bitcoin Come About?
Bitcoin simply put is a digital currency and it was created to get rid of all the problems that we face today with regular currency. Now you might be thinking to yourself, the current system we have works pretty well, but everything that we buy has to go through a bank or credit card company. And when those transactions take place, the bank or credit card company takes a portion of the money. With so many transactions taking place each day, it becomes easy for others to steal your information and steal your money. So you have to trust that your credit card company will keep your information safe.
Many people have tried to come up with systems that’ll eliminate that middleman (bank or credit card company) from the equation. But there’s a problem if you remove this middleman. How do you prove that you’ve paid for something or that you have that money at all? This is called the double-spending problem.
The solution to this problem was found by an anonymous coder named Satoshi Nakamoto. His solution was that instead of a bank or credit card company recording the transactions in one ledger, why not make it so that all the users would record all the transactions at the same time. That way if anyone tried to fool the system the community would notice and the transaction would become invalid and rejected.
Through this system, no one user, bank, or government could put a fee on the transaction or control the flow. As a result, this creates a cheaper and faster way to spend money with anyone around the world.
So there you have it. That is the basics of what Bitcoin is, and it’s already starting to have a large impact on the world. Today you can use Bitcoin to buy and sell goods with those who will accept it. For example, you can simply buy a pizza or get a massage. Either way, the hope is to create a globalized currency with no boundaries or barriers.
Looking Into The Future
Many people think Bitcoin will become the thing of the future but others think it’ll ruin the economy. Whatever side of the fence you are on, you’ll need to do more research and follow the trends to see if it’s worth getting into. For those who have gotten in early have seen both major profits and losses. But if you take a look at the longtail of Bitcoin’s growth, you’ll see that things seem to look pretty promising. However, like any investment, there is still a lot of speculation and uncertainty.
In the end, both sides agree that if we could come up with a digital currency, like Bitcoin, to work. And if we can trust it to work without using the middleman, then things could change for the better.
If you don’t feel comfortable about Bitcoin, try looking into alternate currencies like Ethereum or Litecoin. There are hundreds of different digital currencies out there. Do your research and start getting involved with what you feel comfortable with.