16 January, 2018
 Posted by Ac2ality
3

Bitcoin explained for dummies

Bitcoin explained for dummies… 

In today’s economic system everything we buy has to go through a bank or credit company. When you buy in Starbucks, you aren´t paying them directly, is the bank who pays them & records all the transactions (for security).

For instance…Peter can demonstrate he paid $1M to James because the bank has recorded & verified the transaction.

Ok.. so?

In 2009 an anonymous person Satoshi Nakamoto created a system in which we don’t need that middle man (bank or credit card company) to verify the transactions: Bitcoin.

What is Bitcoin?

Bitcoin is digital money. Anyone can create a Bitcoin account & exchange Bitcoins. Something like a virtual wallet. There are only 21 million Bitcoins out there & no one can produce more.

But how can the bank be replaced? This is, how can transactions be recorded & verified?

For this, Bitcoin uses blockchain technology. This technology is very complex & I won’t get into all the math formulas 2#$%^&*()… but made it simple… a lot of computers verify the transactions, allowing for all transactions to be visible by everyone in a public ledger (document). This ledger would read: user #24 paid 1$ to user #564.

What does this mean?

  1. No banks are needed, so no fees are applied when you send/receive money.
  2. Users are anonymous so no one knows who I pay or for what.
  3. Governments can’t interfere/put restrictions on transactions.
  4. Money transfers inmediatly.

3 comments on “Bitcoin explained for dummies”

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