There is an old story about some blind persons describing an elephant. Some describes its tail, some its trunk, some its ears, some its body and some its tusk. Each one has its own idea of the elephant. You will find a similar phenomenon when you search for “what is bitcoin” on the Internet. You will hear a lot of new words and their descriptions: cryptocurrency, block chain, mining, rabbit hole, and of course Satoshi Nakamoto.
Here is another visually challenged, describing the big elephant called bitcoin. One more blind won’t hurt in a vast ocean of darkness.
What is bitcoin?
There are many different ways to approach the concept of bitcoin. We use a generic one, albeit one that is less used.
Consider the internet as another country. Bitcoin is its currency – the Euro of that virtual continent. But unlike the real-time currencies, it is more of bits and bytes, and less of coin. There are a slew of fundamental differences between bitcoin and traditional currencies.
Why bitcoin is different from traditional currencies
The differences are vital. First, bitcoin does not exist in a physical form. All those coin pictures you see on many articles are misleading. You cannot print the picture of a real bitcoin – even Charlie Hebdo can’t.
Second, there is no central authority like a Federal Reserve or a National Bank that controls its distribution. There exists an online code-driven mechanism and ledger that keeps the record of each and every transaction of bitcoins. That ledger, incidentally, is called the block chain.
You will have a username and multiple passwords to do something with your bitcoin. It is said to have a labyrinthine encryption procedure that prevents misuse and hacking. That is why it is called cryptocurrency. In the unlikely scenario of hacking becomes successful, the hacked bitcoin disappears.
The online mechanism is created and improved by a community – just like the internet community that created and supports free software and Linux. The prime mover behind the community was Satoshi Nakamoto. Don’t contact Japanese postal department to get in touch with him or her. It is just a pseudonym – or something like a fake Facebook profile. He is no longer associated with the project and he remains mysterious and unknown. But the system he helped devise works perfectly.
How bitcoins work
There exist a total of 21 million bitcoins. That is the limit of the number of bitcoin units. It is impossible to find anymore bitcoin units once this number is reached.
A single bitcoin unit can be found through a process called mining. The process basically involves writing some code. You can do it manually, which is a herculean task – and often a fruitless one too. You can join a team that does mining. But the obtained bitcoins will be shared and the individual rewards can be less attractive.
There are programs available that do the coding for you. You need to shell out money – in Dollars or Euros – to buy those programs. You will get bitcoins based on the program’s efficiency.
At the present exchange rate, one bitcoin fetches just over 210 Euros. Of the 21 million bitcoins available, more than 13.75 bitcoins have been mined. There are over 7 million bitcoins remain unearthed. As per the current estimate, the last bitcoin will be found on 2140 – that is, if the Earth and the internet exist till that date.
Its exchange rate is likely to increase. The system is designed in a manner such that it would be difficult to find bitcoins as the undiscovered stock decreases. So, if the theory of demand and supply holds true, its exchange value is set to rise.
At the moment, there are practically three ways to get bitcoins:
- Mining – both individual and software-driven;
- Outright purchase from exchange bureaus;
- Selling some services or products and accepting bitcoin remittances in return.
What can be done with bitcoins?
It is an investment, like stocks or gold, if you believe in it. But that is not bitcoins’ primary use. It can be used as a valid currency to buy anything. At the moment, very few merchants and service providers accept bitcoins. The trend is changing across the world, but not in the way the bitcoin evangelists expect and had predicted.
The transactions using bitcoins have numerous advantages and obviously some disadvantages. Since no physical currency is involved, everything is recorded on the ledger – on the so-called block chain. It shows how many bitcoins you own and what you did with your bitcoins. Practically every transaction is recorded and available in public domain.
It is good and bad. Good for those who have nothing to hide – and not so for those who have something to hide. Imagine the furore if a future US presidential candidate were to be found buying sex toys or porn videos using bitcoin. Bill Clinton can forget about a rerun if bitcoin becomes established.
Its effect in East Europe
East Europe awoke a bit late to bitcoins. The habitual early risers to financial matters, the USAs, Germanys and Japans, stole a march over East Europe with this phenomenon too. As of now, you may not able to survive with just your bitcoin wealth in East Europe.
You can do that in some European cities like Amsterdam and Berlin – with some difficulty of course. Coffee shops, bars, boutique stores, supermarkets and other brick-and-mortar businesses are increasingly accepting bitcoins in these cities.
The Eastern European cities too are fast catching up. A chapter affiliate of the Bitcoin Foundation has come into existence in Romania recently – the first of its kind in East Europe. Germany, the Netherlands and Denmark are the other European countries that have a Bitcoin Foundation chapter affiliate. The first bitcoin ATM too was started in Romania.
After the reasonable success of the Bitcoin Central and Eastern European Conference, held in Ljubljana, Slovenia, on September 11 and 12 last year, the region has witnessed mushrooming activity in almost all the countries. Check this real-time map (http://coinmap.org/) to learn more about the activities. You can find bitcoin start-ups and shops that accept bitcoins in many cities in East Europe now.
It should also be pointed out that some countries, especially Russia, are planning to ban bitcoins because of the lack of state regulation. If the whole world embraces to bitcoins, as it is likely to do in the coming years, East Europe cannot stay away from it.
The day is not afar when you can see what Vladimir Putin does with his bitcoin. Only then can all we blind folks see how big the elephant called bitcoin really is.
Bitcoin in layman’s terms. How to explain to your granny what bitcoin actually is?
Bitcoin has reached skyrocketing popularity recently. TV talks about it emphasizing on the cryptocurrency rate, Internet bloggers dedicate articles to this digital currency, and business publications shed light on its nature. However, bitcoin remains a mystery for some of us.
Adults tend to show a skeptic attitude towards the phenomenon which roots are not clear at all. Crypto industry is one of the most complicated topics our parents and grandparents face. What is more, not all young people have a notion of bitcoin notwithstanding the continuous Internet access. So, how to explain the notion of bitcoin in layman’s terms?
Steps to simply and quickly throw light on bitcoin
1. Take physical money for a basic notion
We all understand what physical money is. It can be carried in a wallet and then exchanged for any kind of products and services. Even small children understand it. Everybody knows that money is tangible and can be brought to the shop so it has value.
2. Show similarities with online banking and cards
In fact, the majority of our transactions is conducted by means of e-money. It can be seen on the webpage of your online banking account or on an ATM’ display. Where is e-cash stored? It’s not like a wallet with e-money you can withdraw, give somebody of pay with. As a matter of fact, all our electronic money is stored in IT systems of commercial banks.
3. We already use e-cash
E-cash is only a number on a bank’s computer attached to your account id.
4. Banks are a chain of intermediaries
Banks serve intermediaries that manage an account with e-money. Therefore, by carrying out an e-payment, we in fact allow a bank to conduct it. Then, there appears a record in a bank’s system claiming it does not deal with your id money anymore, and banking accounts of a third party can now be connected to a receiver’s account. To put it simply, we often buy or pay for something not knowing a receiver and in fact send them anything. It’s a bank that is responsible for the whole process charging relevant commission.
5. Bitcoin eliminates intermediaries
Bitcoin is money we know well. The difference lies in the absence of third parties, which merely eliminates commission. Besides, bitcoin can be used as shares. Its price may fluctuate depending on various aspects. Many people even earn on bitcoin by buying it cheaper and then selling for a higher price.
The notion of mining
A logical question may cross the mind: where to find bitcoins? It’s hard to explain that money can be mined, not made. However, try to liken this process to mining of high-valued minerals. The nuance is that here you need a powerful PC, not a shovel or a pickaxe.
Where to park bitcoin
Bitcoin has grown very popular across the globe. Many companies in the countries with legalized bitcoin have already presented an opportunity to pay for their products through digital money, not only physical or electronic. You can exchange bitcoin for a certain product or even purchase real estate. Remember to follow the exchange since it is unstable and fluctuates all the time. It is called volatility.
The online publication Login Casino created a short video describing its phenomenon in layman’s terms for those who have no notion of digital economy. Click here to watch the video: https://www.youtube.com/watch?v=49eb9gq0vbg&=&t=9s
Login Casino bitcoin marathon has come to an end
Bitcoin Marathon. Marathon from A to Z, organized by the online magazine Login Casino, has come to an end. Over the past few weeks, the leading experts in the cryptoindustry were highlighting the most relevant topics connected with cryptocurrency.
The speakers of our bitcoin marathon were: Maksym Krupyshev, head of game customer service at Cubits, Andrey Ivanov, blockchain projects security development manager at Digital Security, Kristina Kost, founder of the news resource LOFFL.RU, reporting on the world of cryptocurrency and blockchain, and others experts.
The way it happened: https://www.youtube.com/watch?v=mrzX9xyC2HI
The speakers used plain language to tell our participants about what bitcoin and cryptocurrency actually are, what its role in our life is, how and in which spheres it can be applied, what the work with bitcoin should be started with, and which projects are worth being invested in. The experts gave some useful advice concerning the issue of securing your savings, reviewed the major cases, connected with crypto thefts, and shared the secrets of blockchain and ICO project promotion.
Maksym Krupyshev shared his view on what bitcoin is.
“Criptocurrency and fiat currency can work in synergy. Fiat money belongs to the state, and it will be very hard for the state not to have any control over money transactions”, believes Maksym.
Andrey Ivanov, in turn, raised the issue of blockchain project security: “There has been a lot of ICO lately on the market. Some of them are successful, but some are not. As soon as ready money begin to appear there, it starts to be of interest to perpetrators”.
However, if you did not manage to take part in the event during a live broadcast, you can always watch the archive recording in the Login Casino «Library», having authorized yourself on the website.
“We’ve been thinking for a long time over how to help our readers (and now viewers as well) get the access to the broadcast they are interested in anytime, since not everyone can enter the landing during the live broadcast. So, what we came up with was an idea to create a specific Login Casino library – an archive, where all the broadcasts will be stored, and anyone will be able to get an access to them anytime”, told Login Casino.
The next speaker for Login Casino bitcoin-marathon will be Christina Kost (LOFFL.RU)
Login Casino continues its bitcoin-marathon – a series of online conferences devoted to cryptoindustry. The guest of the next webinar, which is going to be held as a part of the bitcoin-marathon, will be Christina Kost. The topic of the webinar is “Trends and prospects of bitcoin in 2018”.
Christina Kost is the creator of the news recourse LOFFL.RU, which is aimed at covering the main events in the world of cryptocurrency and blockchain. Besides, she is the founder of the biggest cryptocurrency blockchain-community CryptoCon in Saint Petersburg.
The speaker is an expert council member of the working party on digital economy to the State Duma of the Russian Federation, and she is also an expert council member in the first blockchain-coworking in Russia – B-CH coworking. She is an organizer of the events devoted to the blockchain industry and an expert in the spheres of ICO and digital economy.
Christina gives her tips for the beginners in ICO: “The first thing to do is to present your project in a proper way, to gather all the market information and then – develop the ways of carrying out ICO, communicate with the experts and companies, which are already in this business”.
Don’t miss the live-webinar with our expert! The broadcast will be on April 10, 2018 at 16:00 here.
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