| It is a number that has a dollar amount associated with it which is currently $$BTC per Bitcoin. Just like a dollar can be broken up into cents, Bitcoin can be broken up into smaller units that are less than a penny. This number is essentially the password to your account (called the private key) and the account number is generated from this secret number (called the public key or Bitcoin address). Anyone who knows the password has access to the money, just like someone with your email password has access to your emails or someone with your bank user id and password has access to your bank account. Bitcoin is the world's first and top cryptocurrency. It is also know as a digital currency. There are currently over 10,000 digital currencies it has A cryptocurrency uses the technology of cryptography to send messages in secret. It's a digital currency, because it only exists on computers, but you can actually store your Bitcoin on a piece of paper or in your mind by just memorizing a secret number that only you know. Cryptography is the science of sending secret messages and has been around for many years Where does the number come from? It's randomly selected from a large set of possible numbers. Flipping a coin 256 times will generate a number that's 2 x 2 x 2 ... x 2 (256 times), which can represent a number from 0 to 2 This number in cryptography is known as the private key. The private key is fed into what called a hash algorithm to generate a public key that you can share with others. When someone sends you Bitcoin, they send it to your public key. So who keeps track of this the Bitcoin corporation? If Bitcoin was run by a government or a company it would work like that. But Bitcoins are tracked by millions of people via open source software, also known as the Block chain. The Blockchain is a database that stores all Bitcoin transactions from the first one on xxxx to the present day. A hash takes an input does some math on it and comes out with a new unique value. See xxxx to try to do a hash. Large random number -> Private key -> Hash -> Public Key Where did the Bitcoins come from? Its name come from a joining of two words, bit and coin. A bit is a 0 or a 1. Bits can represent on/off yes/no; true/false; or strung together a number or and data that stored on a computer. Coin is used to denote money. Know coins in the US are Penny, Nickel, Dime, Quarter. It was founded as far as we know by Satoshi Nakamoto. Bitcoin has a value of $$BTC Digital Gold Bitcoin is currently considered to be more like gold as it's not currently that useful to transact with. This is due to slow transaction times and high transaction costs. Though there is a new technology called the Lightning network that may fix this issue. People and companies are starting to buy Bitcoin for a number of reasons. It seems to be inflation proof due to the limit number Bitcoins that will be produced (21,000,000). Currencies Money is a invention that has changed history. Money is considered a store of value. Currency is a money used in a locality. US Dollar in the US, Euro in most of Europe. These currencies are known despairingly as Fiat Currencies. That are back by violence. The biggest problem with most if not all currencies is the ability for governments to print as much as they want. This can cause inflation, which means you money is worth less today than it was yesterday, that is it can't buy as much. Bitcoin is Secure Easy to transfer High returns Bitcoin has averaged a return of over 200% per year. This obviously can't continue indefinitely. Volatile Bitcoin has major price swings up and down. It has dropped x% n times since it's creation. Bitcoin is Private It's mostly private as there is no name associated with a Bitcoin. Whoever has the key to a bitcoin basically owns the Bitcoin. Bitcoin is Public Every Bitcoin transaction you make is listed on the Blockchain and viewable by anyone who has access to this data. Though the data is listed with the hexadecimal address. If you ever listed you address on the internet then all your transactions can be determined. Bitcoin is a Number Bitcoin is really just a number. This number has an amount associated with it that everyone agrees upon. This number is stored in a database called the Blockchain. Every transaction that ever happened in the Bitcoin world is location on this database. The Blockchain is shared on millions of computers and can be downloaded from Bitcoin is decentralized Most currencies are run by a central authority like the US Government who is in charge of printing, managing the money supply. Bitcoin is secure Bitcoin is not secure Bitcoin is old technology Bitcoin Market Cap Market cap is a financial term used for stocks to denote the total market capitalization of a stock. It's the number of shares times the price. The Bitcoin network has 800 billion invested in it (price * Coins) as is the number one Cryptocurrency taking xx% of the total market cap. Limited Supply of Bitcoin Bitcoin's supply is limited as there will only be 21,000,000 coins in total and there is speculation that 4,000,000 coins have been lost. Lost Coins A Bitcoin is lost if no one knows that password to access it. This can happen through loss of a computer or phone, or sending the coins to an address that no one has the key to. |