Understanding Bitcoin
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Bitcoin is a peer-to-peer digital currency that facilitates global transactions without the need for middlemen like banks, resulting in lower costs and preventing double spending. It operates through a decentralized network of computers using the blockchain technology, which serves as a publicly shared ledger of all transactions. As more companies adopt bitcoin, it is emerging as a viable form of currency, with several major companies reporting significant revenues from bitcoin transactions.
Understanding Bitcoin
- 1. Patrick Manasse Understanding Bitcoin The Currency of the Future
- 2. A common question many people have is "What is Bitcoin?”
- 3. Bitcoin is a peer-to-peer digital currency that trades on public exchanges anywhere in the world between two people at the speed of email. This is a very good question.
- 4. In regular financial transactions. Money goes to the middleman - banks, businesses, currency exchanges, etc. One big advantage of Bitcoin is that these global transactions are processed at a far lower cost than what is typically processed through the traditional financial system. This is called "double spending."
- 5. Bitcoin cuts out double spending.
- 6. But how does it work?
- 7. Bitcoin is comprised of a distributed network of computers that is reliant on the Bitcoin protocol.
- 8. Bitcoin Protocol Confirms or validates every transaction made with a unit of account called a "bitcoin"
- 9. A Bitcoin Can be broken down into fractions Making previously impossible micro-transactions Possible.
- 11. Blockchain is essentially a giant globally shared ledger of every bitcoin transaction in history...
- 12. Ever.
- 13. The blockchain expands as the exchange is automatically lumped together with other new transactions... Resulting in a new "block."
- 14. This system does require a massive amount of computer power to verify, confirm, and record all the transactions, but it is a self-funding system.
- 15. Hold on to your hats. This is where it gets kind of crazy.
- 16. Bitcoins themselves are created through a "mining”"" process.
- 17. This process is the same mathematical process that seals blocks of new transactions onto the blockchain by verifying that every exchange is valid and using real bitcoins.
- 18. The miners are rewarded with new bitcoins for devoting their time and computing power.
- 19. The idea is for the network to reward those who are keeping the network running in a completely decentralized manner.
- 20. THE BOTTOM LINE
- 21. More than just a neat computer experiment, bitcoin is starting to become a popular and viable form of currency.
- 22. More and more companies are beginning to accept bitcoin.
- 23. In fact: The top 8 companies who are accepting bitcoin have had annual revenues totaling more than $85 BILLION.
- 24. Recently, Credit card companies have released cards that operate solely on bitcoins.
- 25. And the popularity of bitcoin keeps on growing
- 26. So basically,
- 27. Bitcoin is Kind of a big deal.