This is educational video series explaining common stumble blocks and misconceptions about Bitcoin!
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Here is a transcript of the video:
Hello, in those videos I'll be addressing common questions and misconceptions about bitcoin!
Todays question is "What is bitcoin?" Explained simple.
Now forget most things you've heard. People discover Bitcoin in a variety of ways, but usually pick up some sort of misconception like "Bitcoin gives free money to people with computers" or "in order to use Bitcoin I have to use a program that wastes electricity for nothing" along the way. Here is a good summary to help you understand Bitcoin in general, by focusing on what Bitcoin is and what problem it solves. These two things are not typically well explained, and it is difficult to appreciate just how effective a technology Bitcoin is until they are understood.
So. what Bitcoin is: An agreement amongst a community of people to use 21 million secure mathematical tokens-"bitcoins"-as money, like traditional African and Asian societies used the money cowry. Unlike the money cowry:
- there will never be more bitcoins
- they are impossible to counterfeit
- they can be divided into as small of pieces as you want
- and they can be transferred instantly across great distances via a digital connection such as the internet.
This is accomplished by the use of powerful cryptography many times stronger than that used by banks. Instead of simply being "sent" coins have to be cryptographically signed over from one entity to another, essentially putting a lock and key on each token so that bitcoins can be securely backed up in multiple places, and so that copying doesn't increase the amount you own.
Because bitcoins are given their value by the community, they don't need to be accepted by anyone else or backed by any authority to succeed. They are like a local currency except much, much more effective and local to the whole world.
The whole system is decentrelized, much like torrents, where every user is also helping to make the system more widely distributed. So, there is no central server to take down, but every user is a server. Making the bitcoin network as resiliant as the internet. Pretty cool, huh?
Now if you have a friend that doesn't understand bitcoin, just send him this video and let ME do the work 🙂
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