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Bitcoin for Dummies - Outside View by Prasheel Vartak

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Bitcoin for Dummies
Feb 20, 2018

Prasheel Vartak

If you are someone who throws around terms like 'Ardor' and 'Genesis Block' daily, this post is perhaps not meant for you. If, on the other hand, you are someone who's been bamboozled by all the cryptocurrency talk and want to join in the action, you've come to the right place.

Let me explain bitcoin to you like I would to a five-year-old. I assure you that by the end of this post, you will be well-versed with the fundamentals of bitcoin, blockchain and mining.

Imagine you give away a piece of candy to another person. It's a tangible, physical thing which is visible to the naked eye. Once you've given away that candy, it is no longer with you. It is now in possession of the other person. You don't need a third party to verify this. The whole process is binary. Either you gave away the candy or you didn't.

What if the candy is not a physical, sugary treat but a digital entity? Even if you do give away the digital candy, how do we know that it is now in possession of the other person? You'd need some sort of a ledger to maintain that record and a witness to prove the authenticity of the transaction.

Bitcoin is that candy and a blockchain is the ledger. Each time you give away the whole candy or a fraction of it, a record is made on the blockchain and it remains for the entire world to see. There's no way for you to cheat by saying that you've given it away when you haven't.

This is the beauty of blockchain technology. Every time you make a bitcoin transaction, it is recorded on this universal ledger and all members of the bitcoin community are witness to it. A perfectly democratic, self-governing system of digital currency.

With me so far? Let's delve a bit further into it using another simple example.

The bitcoin system dictates that only 21,000,000 will ever be created. Let's say bitcoin is analogous to gold. Just like there is only 'X' amount of gold which can be discovered on Earth, there are only 21,000,000 bitcoins available for mining and transactions.

Confused about what mining is? Miners employ their computer hardware to search for a 64-byte number before anyone else can. Each time a computer gets the number right, it is rewarded with 12.5 Bitcoins and a new block is added to the blockchain. As more and more bitcoins are being mined, the probability of finding them is decreasing.

Due to this diminishing supply of newer bitcoins, they appreciate in value as time goes on. As more and more people get their hands on bitcoins, public sentiment drives up the value even higher.

Think of it as a collection of paintings by Picasso. You can't take a painting to a real estate developer and ask for a house in return. However, you can take it to a buyer and get regular currency in exchange. As more people start exchanging bitcoin for money, the bitcoin network keeps expanding globally.

Normal, everyday people are now investing in bitcoin as its value is constantly on the upswing. It is an easy method to stash away a part of your savings in a secure, digital wallet which only you can access. To put it quite simply, bitcoin is the Gold of the internet.

If one had invested in bitcoin two years ago, i.e in January 2016, he would have earned returns amounting to a staggering 2650%! While no one on earth can predict whether this tremendous rise in bitcoin prices will continue, it is a highly wise move to educate yourself about cryptocurrency.

Bitcoin remains the number one cryptocurrency in terms of trade volume and popularity, but others like Ethereum are experiencing a freakishly bullish run too. If you would like to have a firm grasp on cryptocurrency and hear credible, honest opinions from crypto experts, there is an easy way.

Crypto Confidential is a premium monthly newsletter offering insights on what's happening in the world of cryptocurrencies. Members get access to a cryptocurrency tutorial vault that is way worth more than the subscription fees.

Remember, this is the biggest boom in history.

And I believe... you will NEVER see this again... not in your lifetime.

It already happened with Bitcoin, where just $100 invested eight years ago... would be worth $18.5 million today!

And now it could happen all over again with other major cryptocurrencies like Ethereum and the blockchain technology.

That's why Enroll yourself now before you miss the bus.

Warm regards,
Prasheel Vartak
Prasheel Vartak,
Editor, Crypto Confidential

Prasheel Vartak is a Certified Bitcoin Professional (CBP), and works with global Crypto Guru Tama Churchouse to bring to his readers, views, and opinions from the cryptocurrency and blockchain space. Prasheel is the editor of the premium monthly newsletter, Crypto Confidential and has authored a comprehensive learning course on Bitcoin, Blockchain and other cryptocurrencies, viewed from an Indian perspective.

© 2018 Common Sense Living Private Limited

Disclaimer:

There are no recommendations made through this article. This is not an offer to sell or solicitation to buy any crypto currencies. All data/ information contained herein is purely educative and informative Please note that you should make yourself aware that crypto currencies are not regulated in India and any action taken, investment(s) made or decisions taken/or not taken based on the information provided herein is solely at your risk and Common Sense Living Private Limited and/or its affiliate(s), associates, employees or directors will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. This is not directed for access or use by anyone in a country where such use or access is unlawful or which may subject Common Sense or its affiliates to any registration or licensing requirement.

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