what is bitcoin?
So what does bitcoin mean?
So Bit is the amount of units in a bitcoin and Coin is... well, its a currency so it could have been Bitcash or Bitdollars or Bitcurrency but they chose coin, so Bitcoin was born! A bit is just a unit number. So there are 1 million Bits per Bitcoin or 0.000001BTC. There is another unit more popular now called Satoshis which is 0.0000001BTC. 1 Bit is 100 Satoshis. Most people go by the unit of Satoshis but both are accurate. Below is an image showing you units of Bits, Satoshis and bitcoin.
If you were to use bitcoin on your day to day purchases you would be dealing more in the unit Satoshis than bitcoin.
It is also much more than currency though. Bitcoin can be described as a collection of concepts, principles, and technologies, just as Satoshi Nakamoto is often understood as a collection of inventors and inventions. That being said, for the purposes or these beginner lessons we will just talk about Bitcoin as a currency because thats what it is most often known as currently.
Bitcoin, as a unit of currency, are used to store and transmit value between participants in the much larger bitcoin ecosystem and network. This is done by using computing power from machines all around the world! As long as 2 computers are running on the bitcoin network the network will be up and running. (Much like the internet) The awesome thing about Bitcoin is that Anybody can get on the Bitcoin network as long as the device can access the internet. So your home computers and laptops and smart tvs and cell phones and anything else that somebody can connect with online can access these types of networks. When a computer is on the Bitcoin network what that means is that they are helping process transactions on the network. One of the reasons Bitcoin is so cheap to transfer money anywhere in the world is because there are no 3rd parties controlling the servers and making you pay fees to use their network. With Bitcoin, we are all helping the network so there is no one entity controlling the prices.
Eventually, we would want to use bitcoin to buy goods anywhere in the world. No more converting currency or paying outrageous fees transferring money from one place of the world to another. All you need is access to the internet and you can access your money. Much like using your Email, most people use their email on their phone and home computer you have the ability to access it on billions of other locations in the world. The use cases are endless because it is a digital currency which means it can be transmitted anywhere on anything in any form but let's not get too ahead of ourselves.
So Why is Bitcoin different from what's already offered?
Outside of it being a digital form of currency and is not tied to any fiat or physical form of any kind, there are a couple of things that make it much different. First off, there is no central authority, everybody gets to be a part of the Bitcoin network if they choose. In fact, everybody has a say in what direction Bitcoin goes as well. There is no ONE person or entity that decides how you control your money. Which essentially means you get to be your own bank! That means, nobody gets to decide what you do with your money ever! The government can't take it away, you can't get charged extra fees and its completely borderless. Transactions are fast, secure and cheap. This means you can do business over e-mail with somebody in Africa and not need to worry about waiting multiple days or have it come back as a fake transaction. You can send money to your family in a different country and not have to pay those crazy fees either. The possibilities open up drastically. Finally, it is anonymous and transparent, meaning that participants can send and receive value without ever having to identify themselves. This is important when you don't want somebody to know your name or address. Every single transaction network is also shared publicly for everybody to see on something called the Blockchain which we will talk about later. You can have as many wallets you want and make them quickly as well... like an email address. (I know I say that a lot but it's a really good analogy)
I know this is a lot to take in but in short, bitcoin is not just the next version of money. As Andreas Antonopoulos says, "Bitcoin is not the money of the internet, it is the internet of money" meaning Bitcoin will change the financial system as much if not more than the internet changed the world. Bitcoin is also so much more than just helping financials as well, the possibilities are endless... like the internet.
I remember when I first heard about bitcoin I didn't get it, it took me a long time to see the bigger picture and I to be honest I have not fully grasped all the possibilities of what bitcoin is and can be. I want you to sit there and think about this for a second. Until now we had NO CHOICE but to trust a 3rd party to trust our money. The problem ultimately is one of trust between unrelated parties over a network that cannot be fully trusted. This problem exists in today’s economy and infrastructure. This problem has existed in everything we do online and on the internet and this problem has touched every corner of our financial systems...
This is true now as bitcoin itself is a unit and network of currency. What needs to be understood is that this is an entirely decentralized financial system where you, as an individual, can become your own bank, sending and receiving currency while staying completely anonymous while not needing to even worry about trusting the person you're transacting with. This is currently the most secure form of currency that has ever been created in the history of mankind. I will say that again, Bitcoin is FACTUALLY not by opinion the MOST SECURE form of currency that mankind has ever been created by man. Not only is it the most secure but you also don't need to worry about hyperinflation either because it can't happen with bitcoin. Yet the masses are backing banks and not bitcoin currently which is mind-blowing.
Next, we are going to talk about how you can get bitcoins for basically free by getting on the bitcoin network.
Some extra recommendations to keep you busy before the next section...
The Internet of Money Volume 2- by Andreas M. Antonopoulos
The Bitcoin Standard: The Decentralized Alternative to Central Banking - by Saifedean Ammous
"Introduction to Bitcoin" - Andreas Antonopoulos