Understanding Bitcoin | The future of Money, Banking and Finance?

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3 years ago

Here are my thoughts on Bitcoin, a short explanation of why it works and how it could be useful in the future.

BTC and cryptocurrency is a form of digital money invented recently, available through the internet. In many countries, people have limited or no access to traditional financial products. In Europe and the US, millions are either unbanked or underbanked. Developing countries are even worse, people's money is controlled by totalitarian governments and corrupt institutions.

Bitcoin is created through mining. Similarly to minerals, in order to get a coin, the miner, which in the case of bitcoin is a computer, needs to run an algorithm, solving complicated equations. These equations validate the transactions of the network, and miners are compensated in BTC by the algorithm, to make up for their hardware and energy expenditure. Transactions are validated by all the systems participating in the process, and a copy of all transactions are stored on each Block (each computer participating on the network), and every participant has access to those transactions. Bitcoin is by design inflationary, as, roughly every 4 years, the reward to miners is halved, reaching to an asymptotic finite number of bitcoins we will reach, at the current rate, in 2140.

The network itself is called Blockchain. It works as an accounting ledger, only, instead of being in the hands of a single individual or entity, it is in the hands of every participant. It is thus a decentralized currency, in contrast to other fiat alternatives. The more Blocks in a Blockchain, the more secure it is, as the more processing power is dedicated to ensuring that each bitcoin is authentic.

For something to qualify as money it needs to have 4 characteristics and serve 4 functions. In the video I analyze how Bitcoin fits all these criteria, and how it serves all these functions.

In order to buy Bitcoin, you only need to sign up to an app on your phone or on your computer. You can use the sign up links below to earn rewards on your deposits.

Earn another $10 in BTC when you buy $100 of Bitcoin, Etherium or any other cryptocurrency: https://www.coinbase.com/join/tafas_e

Earn up to 8.6% APY on your Digital Currency, and up to $250 when you deposit $25 or more using BlockFi: https://blockfi.mxuy67.net/b6LYP

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Avatar for BudgetHolics
3 years ago