Many people believe Bitcoin to be very complicated, when in fact its a lot more simple and intuitive than what most people think. This series aims to help everyone get a grasp of the basics, and over time also present further learning opportunities for those that want to know more.
Bitcoin is often explained by comparing it to something specific people already know, but this is often what creates a lot of confusion. Bitcoin is a new technology that is unlike anything we have seen before, so a better way to think of it is as a combination of a few different things we are already used to:
Firstly, because it allows you to move money so easily, Bitcoin functions as a payment system, similar to bank transfers or credit cards, only a bit better.
Second, Bitcoin is in some sense similar to gold - that is why many people even refer to it as digital gold or Gold 2.0. Think of it as using gold for money, except it also very easy to move.
Third, Bitcoin is like the internet in that no single person or entity controls it, so anyone can pretty much use it as they like. This gives it some very unique characteristics.
These three characteristics also reinforce one another, so they are all interwoven. But more on all of this in the next few sections. For now, just imagine what would happen if you took a big pot and threw in a credit card, a piece of gold, and a hint of internet - mix it all up - and pull out a brand new compound - Bitcoin!
Ten reasons you should consider buying Bitcoin in 2018
1 JAN 2017. 3 minute read
In some ways, Bitcoin is just another currency: it has an exchange rate against other currencies, it can be bought, sold and it can be used to pay for things online.
Bitcoin is taking the financial world by storm. Here are ten reasons why you should consider buying Bitcoin.
1. The price
If you look at a graph of the Bitcoin price throughout its entire existence, the overall trend shows that it has only increased.
There are many people who believe the price will go up ten, hundred or even thousand-fold in the next few years.
Nobody can predict the future price, but the momentum, increased transaction rate of people using it, banks and companies investing in and using Bitcoin are all very healthy indicators.
2. Bitcoin is global
Bitcoin knows no borders. It can easily be sent from one Bitcoin wallet to another; across the room or across an ocean.
Since it is sent peer-to-peer, there are no third parties or borders to restrict the transaction. Bitcoin can be bought and sold in local currencies in almost every country in the world.
3. Bitcoin is good for businesses
Transaction fees levied by card processors and transfer fees charged by banks for international transactions can be significantly more expensive than the small fees charged for sending Bitcoin.
For example, merchants pay between 2-6% to accept online credit card payments, with high rates of credit card fraud. These costs are passed down to the consumer.
It costs a fraction of that to process a Bitcoin payment and the chargeback risk is zero.
4. Bitcoin is fast
It takes one to two days to receive a bank payment from a different bank and up to a week (or more) to receive an international bank transfer.
Bitcoin transactions are instantly sent and are usually confirmed in under 30 minutes, no matter where in the world they were sent to.
5. Bitcoin protects your privacy
Unlike most other payments, to complete a Bitcoin transaction you don't need to provide any sensitive information (which can easily be stolen or abused).
When you want to receive a payment, simply provide the sender with your Bitcoin wallet address. This address is a receive-only address: you're free to distribute it (people can only send money to it and pay you, not withdraw from it).
You don't need to send your full name, your physical address or your credit card number when making Bitcoin payments.
6. Bitcoin is transparent
All Bitcoin transactions that have ever happened are recorded in a ledger known as the Blockchain. This makes Bitcoin a great tool to follow the exact flow of money. This, despite early incorrect press, makes Bitcoin a terrible mechanism for facilitating crime and a great one for legitimate transactions.
Note that a Bitcoin wallet's balance and payment history are publicly available, but the identity of the wallet owner isn't.
7. Bitcoin is irreversible
If someone uses a stolen credit card at your store, the owner of the stolen card can simply reverse the charges with their bank (a process known as a chargeback).
Chargebacks and reversals simply aren't possible with Bitcoin.
8. Bitcoin is decentralised
Bitcoin has no centralised control: no single company, person or government owns or issues it, so there is no potential central point of failure. A distributed network of computers work together to form part of the Bitcoin network.
This means that should one part of the network go offline, for any reason, Bitcoin transactions will continue to be processed and confirmed by the remainder of the working network.
9. Bitcoin can bank the unbanked
There are many people in developing countries without access to bank accounts. Others have bank accounts but can't make international payments.
There is a possibility that Bitcoin wallets can become easily accessible platforms for people who are currently excluded from the traditional financial world, to store and transfer money.
10. Bitcoin is separate from the global economy
Traditional currencies are printed and controlled by central banks and governments.
Bitcoin is not affected by this in any way, meaning that it is not associated with other national currencies or the stock market. Because of this, it is possible that Bitcoin could benefit from the collapse of the economy.
So, as the traditional economy continues to collapse or remain unstable, Bitcoin becomes a safer place for us to put our money.
It would make sense for anyone worried about the state of the global economy to begin buying Bitcoin.