Peter posted this on December 9, 2020
A couple years back I wrote a spur of the moment post expressing what I think of Bitcoin,
People who read it were lost (What’s this Bitcoin thing) so I’d try to explain it as simply as possible here in simple English with little or no buzzwords so I don’t have to repeat the same explanation over and over.
One thing I enjoy doing is understanding complex concepts & breaking them down do the simple bits.
This is not going to be a deep-dive into the topic, concepts are going to be explained as simply as possible also as this is just a guide to allow any first timer have an understanding of the currency.
One thing you come to learn over time is that you can’t be/do everything.
In the Ancient world, there were those who farmed, those who fished, those who hunted and the philosophers who sat on rocks with a finger on their chin.
At times a farmer might want fish, a fisherman might want wheat and so on, so a simple system of exchange was created where you determine how many handfuls of rice were worth a cut of deer.
This is called barter.
This obviously was a flawed system as with the same leg of deer, I could get a very large or very little quantity of rice depending on the desperation of the person exchanging.
The need to have a stable & central way to assign value (price) to different items (I can imagine the philosopher negotiating how much meat his thoughts are worth) as well as use something that would be easy to to divide led to different civilizations using different things as a means of exchange.
Cowries, cocoa beans, whale teeth, salt, tulips, tea bricks, parmesan cheese, copper, silver, gold have all been used as money.
By now we know Bitcoin is not issued by any central bank, government or commercial bank.
Bitcoin was programmed to have a maximum of 21,000,000 coins in total and new coins are produced as a reward for a process known as “mining“.
For the Bitcoin system to work, individuals have to make their computers available to process transactions on the blockchain for everyone. The computers are made to process very complex problems and the owners of the computer are usually awarded a small amount of bitcoin which they can now spend and put into the system.
Bitcoin is designed so as more coins are created (21m maximum), the problems these computers would have to solve to get rewarded would become more complex (to ensure scarcity) meaning people would need more powerful computers.
There are people who set up warehouses full of really powerful computers to mine bitcoin, these days if you try to do this with your normal home computers, it might be years before you’d make a single bitcoin
Bitcoin is Open Source software (this is geek speak for software which anyone that knows how to program can edit, improve or make copies of). This means a lot of people have contributed to it and a lot of people have a say on how it should operate.
At times, there are disagreements on the way Bitcoin should be run and these disagreements usually result a new branch of bitcoin being formed. These branches are called forks. Usually if you held some bitcoin at the time of the fork, you’d be credited with some of the new coin. Some notable forks are: Bitcoin Cash, Bitcoin Gold and Bitcoin SV.
At the moment none has gotten the wide acceptance and usage bitcoin has but probably things may get different with time.
You would need a Bitcoin wallet (like mentioned above) in order to spend and receive bitcoin. There are 4 types of Wallet; Hardware, Web, Mobile and Desktop, depending on the type of device you’d use most of the time and the level of flexibility/security you want.
A good Mobile Wallet (works for both Android & iOS and lets you use your bitcoin from your phone) is Edge,
A good Hardware wallet (like a usb drive, lets you keep your bitcoin physically (you can store it in a safe)) is Trezor
One good Desktop wallet (works on desktop and laptop computers) is Electrum
When you use any of these, on creating a wallet, you get a private key/seed phrase which you should keep securely (you can print) and would let you recover your bitcoin if at any point you lose your phone or computer .
I didn’t mention any Web/online wallets as I don’t like the idea of a company having control of my bitcoin (I’ve not seen any that gives you your private key) and anything online can be hacked or put out of business but a lot of people use Bitcoin.com and Coinbase.
There are a lot of other options for the wallets above but these are what I’ve used which give you control of your coins.
So sign up with any of them, create a wallet, write or print your private key/seed phrase & keep your wallet address handy
Now you have a wallet to spend and receive bitcoin, the next thing should be getting some bitcoin in it.
You can buy bitcoin, get paid in bitcoin or mine bitcoin.
You can buy Bitcoin on Binance, Bitcoin.com, Coinbase or from anyone who has some and would like to exchange for normal money (be careful of scammers). If you sell a product or service you can also ask to be paid in bitcoin and receive the payment in your wallet.
Mining is a more complicated process so I won’t talk about that here.
So you have a functional wallet, you have Bitcoin in it & you can now paint the town red…… or send some to me!
A growing list of merchants accept bitcoin worldwide including my Hosting Website , Wikipedia, Microsoft, AT & T and so on so you can always look out for a sign that BTC is accepted. You can find a list of merchants here or search on spendabit.co .
Is anything not clear?
Is there anything that needs to be here that isn’t? Send a message 🙂
Do you want to send me Bitcoin? Click here
Featured Image by MAFIK OLAMIDE from Pexels
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