Part 1. What is Bitcoin? A quick intro.💡
Skip the basics? Jump directly to how to buy Bitcoin in three minutes!⚡️
Bitcoin can be seen as multiple things – some see it as digital gold, a rare asset that functions as a store of value. But that doesn’t mean it has to fulfill the same purpose for you. Maybe you want to see it as internet money you can shop for or use to transact with anyone across the globe without the need of a third party or middleman.
The first crypto-currency! 💰
But at its core Bitcoin is the first decentralized currency that’s not printed out or managed by a state, government or central bank and because of that sits outside the traditional slow banking system we’ve been stuck with until now. At the same time, it’s also totally global, transparent and an open network that anyone can participate in. This is possible because we for the first time have money in the form of software, where your bank no longer needs to be more than an application on your smartphone. 📱
In the end, it’s actually the first truly rare digital object that was created:
If you earlier through example E-mail would send an image that would be a copy being sent where at the end of the interaction both would have a copy each of the image. Which worked excellent for that purpose and disrupted the whole way we communicate, but for sending money through the internet it would be a disaster since you could create new money endlessly. With Bitcoin, on the other hand, you can send something digitally – where as soon as you sent it everyone else in the network can verify that you no longer possess the object and that it now belongs to the recipient. All this is made possible by the revolutionary technology called the blockchain which you will learn more of in the next step!
Many people consider Bitcoin and cryptocurrencies to be the money of the future and the next step in a long going monetary development from seashells, gold, coins, paper bills, credit cards and now we instead of having plastic cards invented in the 50s have digital money that exists entirely on the internet.
In fact, Bitcoin is the best form of money humans have ever invented.
– Ted Rogers CSO @ Xapo
But why would anyone want to use Bitcoin?
It’s quick! ⚡️
Bitcoin only takes minutes to clear compared to bank transfers that actually takes days, or weeks if it’s sent international, to clear since they often need to go through multiple different banks.
Open to precisely everyone! 🤝
It can be easy for us in the western world to miss the purpose and need for a decentralized currency like Bitcoin since we in most cases have such a safe and relatively quick banking systems compared to the rest of the world. But the fact is that we are a very privileged minority since most of our globes inhabitants still today don’t even have access to a basic bank account and are because of that excluded from global financial markets.
With Bitcoin you don’t need an ID-card, a home, a job or someones permission to open an account. Since it’s what’s called a permissionless system all you have to take part of the global network is to download an application on your phone and you instantly have the power of a bank in your pocket, ready to do transactions with people and business all across the world.
Access to financial services can serve as a bridge out of poverty.
– World Bank Group President Jim Yong Kim 🌍
To send money globally earlier you had to turn to third parties and middleman companies like the Western Union where the fees can be up to 10%. This is directly hurting the poorest in our communities that left their home countries to work abroad to be able to support their families back home by sending them their paychecks.
At the moment Bitcoin transactions can cost quite a lot as well since it’s popularity and usage absolutely has exploded. However, this is going to be solved in the near future by technical upgrades that are already here – SegWit, or on its way – Lightning Network. ⏱
Central governments can’t take it away from you!🏛
This is also something we luckily don’t have to worry too much daily about in the Western world but for the people in countries like China, North Korea, and Venezuela this is an extremely important feature.
Thieves or hackers can’t simply steal your money by reading the numbers on your plastic card from your bank, so if you follow CoinSpecto’s advice and guides how to store your coins properly you can sleep well knowing your funds are safe.
No inflation! 📈
Bitcoin is designed in a way that it will ever only exist 21 million bitcoins! (These are of course dividable into very small pieces, the smallest one being a satoshi which is 0.00000001 bitcoin.) With our regular currencies the people in control can choose to print as much money they feel like or need to if they, for example, have a massive debt or war to pay for. This leads to a constant drop in the currencies value and purchasing-power and in countries with extremely reckless and corrupt governments like Venezuela the inflation can reach up to 34% a month. However, even in a massive economy like the U.S, the dollar has lost 82% of it’s purchasing power since the 70’s…
You don’t have to trust somebody else because you own it!💪
Since every owner of bitcoin themselves control and store their coins means you don’t have to trust a bank or company to one day return the money you give them to keep safe. In the country of Greece this was something the population had to learn the importance of the hard way when during the financial crisis the ATM’s one day simply stopped giving out cash, and they’re money was no longer theirs. 💸
So who created Bitcoin? 👨💻
The fact that no one knows who’s behind this innovation that sparked a financial revolution is something a lot of newcomers to cryptocurrencies have a hard time grasping. But the story goes that in November of 2008 a person or a group published a paper behind the pseudonym Satoshi Nakamoto that laid out the foundation for Bitcoin. And the true identity behind that name is still unknown to this date. After releasing the first version of the Bitcoin-software Nakamoto then let the community that had formed around the open-source project lead and take over and in the spring of 2011 was the last time anyone heard from the secretive mastermind himself.
This is one of the reasons why Bitcoin is seen by many to be the only truly decentralized cryptocurrency since no front figure in the shape of a founder, CEO or company has the power to decide and rule what Bitcoin is and should be.
We hope that this introduction made it a bit more clear for you what Bitcoin is, where it comes from and why it’s so exciting. If that’s the case consider sharing this Bitcoin Beginner Guide to friends and family so they also can join this financial revolution. 🚀
In the next part of the Bitcoin Beginner Guide you’ll learn more about the underlying technology that made Bitcoin and cryptocurrencies possible, the blockchain.
If you already feel like you know enough about it or are in a rush jump to Step 3. where we go through how you can make your first cryptocurrency investment.