Beginners guide to Blockchain Part I: What is Bitcoin?

What is Bitcoin? Article by Chris Pace — Art by Irena Orlov.

Crypto, Blockchain, Satoshi, Cypher Punks, etc. you’ve heard this words all over the but what are they exactly and most importantly how can you take advantage of these opportunities?

That’s the goal of this brief series of articles: To give you the very basics of what is being called “The Blockchain Revolution”. In the following paragraphs I will describe the biggest branches that are being developed since the inception of Bitcoin in 2008.

One thing that I’ve learned is that each of this branches deserves at least 20 hours of research and study each to fully understand them so as always, DYOR (Do Your Own Research), this is not financial advice, stay curious and be safe in the crypto world.

Let’s start.

What is Bitcoin?

Bitcoin is a digital currency which operates free of any central control or the oversight of banks or governments instead it relies on peer to peer software and cryptography.

Bitcoin was not the first attempt at digital currency, it had it’s predecessors (Bit Gold, B-money, Hash Cash, etc.) but bitcoin was the first one to solve the problem of double spending which was key to its success.

Also known as BTC, Bitcoin was founded by an unknown person or group of people named Satoshi Nakamoto in 2018. It’s quite fun to go deep into all of the conspiracy theories on who the founder really is but it’s probably better if we never find out.

BTC is known for being highly volatile having historical downs of up to 80% and average 200% growth per year up until 2021. To add to this it can be highly manipulated because only 10,000 wallets own one third of all the BTC circulation according to this TIME article (there are only 200 million bitcoin wallets open as of late 2021).

You can still read the original white-paper of the Bitcoin project here.

Bitcoin is probably best compared to what gold is in our current society. It’s an asset you can purchase to store value long term and hope it appreciates. It can also be used to purchase every day items (like El Salvador’s president has been testing nation wide) but it’s probably a bad thing to do at the moment of writing because there’s a lot of projections of BTC’s price going anywhere between $1,000,000 USD to $8,000,000 USD in the next 15 years.

The BTC community even celebrates the Bitcoin Pizza Day every May 22nd commemorating the day Jeremy Sturdivant, spent 10,000 BTC on two Papa John’s pizzas. Those tokens would be worth $365,000,000 USD right now. So one of the safest things to do with BTC is to hold it long term, or HODL as the kids call it.

A couple of other basic characteristics of Bitcoin are that:

  1. It’s fast and safe. You can send BTC everywhere in the world in a matter of minutes and you can get a BTC wallet address in matter of seconds. It is also extremely safe as long as you do not share your seed phrase with anyone at all. ANYONE AT ALL.
  2. It’s transparent but anonymous. Every single transaction done in the Bitcoin network is recorded and open for everyone to see in what is called the Bitcoin Blockchain. However, no one will know your name at all as the only thing they can see is your wallet number and what you have in there, so if you are pro-privacy don’t reveal your BTC address anywhere.
  3. It’s decentralized and scarce. BTC is programmed to only ever create 21,000,000 Bitcoins, a goal that will de reached by 2078. It is also programmed to do something called a “halving” which is an event where every 4 years the people in charge of “mining” bitcoin (creating bitcoin through solving math problems, read more about it here) get half the rewards of bitcoin as they did for the past four years. And because there is no government printing out more tokens like crazy, the fact that Bitcoin is scarce will help people want it more and add to it’s value long term.

So, I hope that by now you know a bit more about Bitcoin than you did before. It is a fascinating project that triggered the Blockchain revolution we are living right now.

If you want to know more follow me on twitter @thechrispace and stay tuned for our next article in this brief guide of “A Beginners Guide to Blockchain Part2: What is the Blockchain?”.

Chris Pace.

www.thechrispace.com

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