What Is Bitcoin and How Does It Work?
[ THREAD ]
[ THREAD ]
Overview:
1. What is Bitcoin?
2. Who made Bitcoin?
3. How does Bitcoin work?
4. What is mining?
5. What does Bitcoin solve?
1. What is Bitcoin?
2. Who made Bitcoin?
3. How does Bitcoin work?
4. What is mining?
5. What does Bitcoin solve?
1. What Is Bitcoin?
Bitcoin is a digital currency.
Bitcoin lets you store, send, and receive money without needing banks or Venmo.
There are only 21 million bitcoins in existence.
Bitcoin is a digital currency.
Bitcoin lets you store, send, and receive money without needing banks or Venmo.
There are only 21 million bitcoins in existence.
2. Who Made Bitcoin?
Bitcoin was created in 2009 by Satoshi Nakamoto.
"Who?"
We don't know either.
He or she disappeared in 2011.
Bitcoin was created in 2009 by Satoshi Nakamoto.
"Who?"
We don't know either.
He or she disappeared in 2011.
3. How Does Bitcoin Work?
Bitcoin is built on blockchain technology.
Blockchain is a type of database.
A database is a collection of information like:
• store inventories
• bank transactions
• school attendance records
Bitcoin is built on blockchain technology.
Blockchain is a type of database.
A database is a collection of information like:
• store inventories
• bank transactions
• school attendance records
Bitcoin's database keeps track of how much bitcoin each person has.
This database is:
a) transparent
b) immutable
c) decentralized
Let's break these down one by one.
This database is:
a) transparent
b) immutable
c) decentralized
Let's break these down one by one.
a) Transparent:
Bitcoin's database and code are publicly accessible.
Anyone can look into the database and see every transaction in Bitcoin's history.
Anyone can look at Bitcoin's code to:
• see how it works
• review for bugs
• suggest improvements
Bitcoin's database and code are publicly accessible.
Anyone can look into the database and see every transaction in Bitcoin's history.
Anyone can look at Bitcoin's code to:
• see how it works
• review for bugs
• suggest improvements
b) Immutable:
Transactions can't be changed once it's added to the database.
No one can edit, delete, or reverse transactions.
You can trust the information in the database is legit because it can't be fucked with.
Transactions can't be changed once it's added to the database.
No one can edit, delete, or reverse transactions.
You can trust the information in the database is legit because it can't be fucked with.
c) Decentralized:
Bitcoin is a peer-to-peer (P2P) network.
The network isn't hosted on a single server controlled by one company.
Instead, it is hosted by people sharing their computing power from around the world.
Bitcoin is a peer-to-peer (P2P) network.
The network isn't hosted on a single server controlled by one company.
Instead, it is hosted by people sharing their computing power from around the world.
All these computers are linked together.
They are all running Bitcoin's software to maintain the network.
No single computer owns or controls the network.
They are all running Bitcoin's software to maintain the network.
No single computer owns or controls the network.
The network gets stronger as more computers are added.
You need to shut down every single computer running Bitcoin's software to shut down the network.
You need to shut down every single computer running Bitcoin's software to shut down the network.
4. What Is Mining?
Mining is when computers verify and add transactions to Bitcoin's database by solving complex puzzles.
Miners need a specialized computer with a lot of computing power.
They get rewarded in bitcoin in exchange for their work.
Mining is when computers verify and add transactions to Bitcoin's database by solving complex puzzles.
Miners need a specialized computer with a lot of computing power.
They get rewarded in bitcoin in exchange for their work.
Imagine a Google Sheet that everyone around the world is working on together.
The fastest person to verify and add a transaction to the spreadsheet gets rewarded in bitcoin.
Everyone is checking each other's work to make sure the spreadsheet is correct.
The fastest person to verify and add a transaction to the spreadsheet gets rewarded in bitcoin.
Everyone is checking each other's work to make sure the spreadsheet is correct.
5. What Does Bitcoin Solve?
Bitcoin solves centralized control of money and removes middlemen from transactions.
Bitcoin solves centralized control of money and removes middlemen from transactions.
Centralized Control of Money:
Central banks have complete control over money.
They can create as much money as they want, whenever they want.
The more money they print, the less money is worth.
Central banks have complete control over money.
They can create as much money as they want, whenever they want.
The more money they print, the less money is worth.
There are only 21 million bitcoins in existence.
No one controls the Bitcoin network.
No one can create more Bitcoin.
Bitcoin is unfuckable money.
No one controls the Bitcoin network.
No one can create more Bitcoin.
Bitcoin is unfuckable money.
Removing Middlemen From Transactions:
Banks and Venmo have complete control of their platform.
They can:
• delete your account
• restrict your account
• change transactions in their database
They can stop you from accessing your money like how Robinhood restricted trading.
Banks and Venmo have complete control of their platform.
They can:
• delete your account
• restrict your account
• change transactions in their database
They can stop you from accessing your money like how Robinhood restricted trading.
Bitcoin takes banks and Venmo out of the equation.
You can send money directly to anyone using Bitcoin's network.
You can access your money 24/7, 365 days a year.
You can send money directly to anyone using Bitcoin's network.
You can access your money 24/7, 365 days a year.
Anyone can use Bitcoin's network to store, send, and receive money.
There are no:
• applications
• credit checks
• business hours
There are no:
• applications
• credit checks
• business hours
It doesn't matter:
• where you live
• what race you are
• what language you speak
• how much money you make
All you need is an internet connection.
• where you live
• what race you are
• what language you speak
• how much money you make
All you need is an internet connection.
TL;DR:
Bitcoin is unfuckable money.
Bitcoin is the beginning of an open and transparent financial system for all.
Bitcoin is unfuckable money.
Bitcoin is the beginning of an open and transparent financial system for all.
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