Bitcoin & Blockchain

Bitcoin is an electronic currency. It is practically a ‘universal currency’ like the Euro for the internet. You can sell Bitcoins for real cash through Bitcoin money changers they call Bitcoin Exchanges. Bitcoin is good for micro-markets, hence you might think it is a currency for bartering. Micro-market means the price is determined between two parties but it is not bartering because there is this Bitcoin currency in between. You can also earn Bitcoin ‘bucks’ through so form of work like filling a survey or winning a video game.

The Bitcoin system keeps track of the amount of Bitcoins you have under your name using a centralized ledger that gets updated every so often from data stored on the computers of Bitcoin users. Sometimes there are discrepancies because the system is now so big.

So Blockchain was created as a discentralized but always updated ledger so you have accurate information about how much someone can afford.

Banks in the real world are wondering what role they might play in this Bitcoin system, because the use of Bitcoin is on the rise for the fact that the entire system is anonymous (like a Swiss bank account); Bitcoin is a crypto-currency. Usually governments do not like Bitcoin and experts think that Bitcoin might be over rated.

Bitcoin might be like the Uber of money. Is Uber a ‘bubble’ to you? From Bitcoin to real cash, there is an exchange in favor of Bitcoin and this technology’s fans like it. I liken them to a global cottage industry and a sub culture like art collecting, and because so, they might be a high net worth customer base.

The Bitcoin minting process (when a Bitcoin comes into existence) is funny. One Bitcoin can have different denominations. So a Bitcoin is not a fixed amount like 1 byte or $1. One Bitcoin can have different denominations based on what is inside someone’s ledger account. Say you make a ‘trade’ for art for $1 million, you can pass that amount through 1 Bitcoin instead of 1 million $1 Bitcoins. And the ID number on that particular Bitcoin will cash out at $1 million but a kid’s Bitcoin might cash out at $10 that the kid ‘traded’ for some comic books.

As someone said, Bitcoin can get like trading a Monet for a Picasso and paying up the difference. You have to know things.

 

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