Welcome to the BitcoinNews Introduction Series for the Bitcoin beginner!
You’re probably here because you’re curious about Bitcoin. Is it a new kind of money? Is it digital gold? Is it the future PayPal? The beauty about Bitcoin is it can be all of these things and more. Bitcoin may have been designed by some of the brightest minds in computer security and finance, but once you get past the technicality of using it, you’ll see that Bitcoin was made for everyone and every possible financial use.
The aim of the our Introduction Series is to explain how Bitcoin works, how to get some, how to use it, how to protect yourself against scams – with explanations that are as simple and non-technical as possible.
At the same time, you should know that Bitcoin is very addictive – as you learn more about, you’ll want to understand more, you’ll want to learn how to use it better, and hopefully, benefit from the wave of change that is currently sweeping through the world of finance thanks to Bitcoin and its innovative technology.
Bitcoin in a few words
The very first phrase that introduced the world to Bitcoin was this: “A peer-to-peer digital currency”. This was the title of an obscure 9-page white paper that emerged in an even more obscure mailing list.
Its creator(s), who went by the pseudonym Satoshi Nakamoto, had come up with a brilliant idea that would allow people to send money to each other over the Internet, without ever having to trust another person to help get their money sent, hence, peer-to-peer (P2P).
Why is this important? Because, traditionally, when we send money to other people, we always have to rely on someone else or something else. Every time we pay or send money, we’re actually sending our funds to a third party or intermediary, who then ensures our money reaches the receiver.
When we send a bank transfer, we trust the bank to credit the recipient’s account. When we shop with a credit card, we trust the credit company to settle our payments to the merchant. When we pay with Paypal, we trust Paypal will credit the merchants with our payment.
But for the first time, Bitcoin proposed that you could send money to anyone in the world, directly. And, thanks to its technology of sophisticated cryptography Bitcoin proposed a system where information and data is coded in a form that can only be decoded and understood by the people you allow (hence, the reference to Bitcoin as a cryptocurrency). This way, your funds would be protected and secured, accessible only by you and the people you allowed. Never again would you have to trust a bank to store your money since only you were in complete control.
So there we have it. At its very core, Bitcoin is a cryptocurrency that allows trustless and secure P2P payments. Bitcoin can also refer to the technology that runs it or the network that secures it.