What is the Bitcoin?
You may be asking. What is the Bitcoin? How is there digital money circulating around the globe without banks at a fraction of the cost?
You may be asking. Why the banks and governments made statements that the Bitcoin would die on the vine? It is not stable. It’s here today. Even after reports, you read years ago in the media?
“Don’t forget that the millions of people all over the world who are now part of the Bitcoin network were once very strong skeptics. This includes people with decades of experience in network security and cryptography.” -Andreas Antonopoulos
I understand. If you have been scratching your head; after hearing complex presentations on how the Bitcoin works. What I would like to do is make it simple for you and your group.
Why does Bitcoin exist?
I will describe to you how it works, but first, allow me to describe to you why it exists. Discussing things in this order will make it much easier to understand and remember.
We all are familiar with how banks work. Someone makes a deposit. The bank holds the funds. The next person makes a withdraw. The purpose of the Bitcoin is to eliminate the middleman. The elimination of the middleman reduces cost and enables transfer instantaneously.
How does Bitcoin work?
The Bitcoin transaction is opposite from traditional banking in two aspects:
- First, how a bitcoin is sent
- Second, how a bitcoin is secured
The bitcoin transaction system is easy to understand. The key is to remember there are no middlemen. Banks are not involved with it. The transactions are faster. The sender sends a bitcoin directly to the receiver.
The public ledger records the transaction. The bank held the ledger in the old system. The bitcoin miners maintain the ledger. This maintenance of the ledger is blockchain.
The Blockchain is the system upon which the digital currency relies. If you want to read more about the Blockchain click over to my other page.
The old way is called centralized banking. Banks store all the money. The financial institution provides the security. Centralization made the banks the easy target for hackers. Hackers would penetrate the system and steal hordes of money. Banks built huge security structures to protect themselves. This was expensive. We had to trust them with the information.
The new system is decentralized. This is similar to the internet there is no central location. Only lots of hubs. Making the network very secure.
Bitcoin and Blockchain are moving upwards. If you want to hear and understand more. Contact me for information.