Another Bitcoin (BTC) explanatory article? Not again..
But no. This is a quest to write the simplest paper in the world on what is bitcoin and what it can do. Clap for this if I’ve explained it clearly.
Bitcoin is the first official cryptocurrency started by a mysterious guy called Satoshi Nakamoto. He released 21,000,000 Bitcoins onto the internet and made it possible for anyone to earn them.
It’s like money, but, digital. There’s no paper cash or note to represent it.
So what?
That’s where everyone says the buzzword “Decentralisation”. In other words, not centralised (duh).
The money you have right now is centralised. It is controlled by governments in each country. The US Dollar is printed by the Government and they have control over the demand, supply, reserves, and they can control it however they want to.
Bitcoin has no master. But what about Satoshi Nakamoto?
That’s where we lead to the next buzzword, “Blockchain”.
This new technology — Blockchain — prevents anyone from lording over your hard-earned Bitcoin. Every transaction (when you transfer 1 BTC to me or when I transfer 1 BTC to you) is publicly shown to the entire internet. Anyone can know how much BTC you have. Anyone can check how much BTC you sent and received. It is permanently on the blockchain and it cannot be destroyed, it cannot be changed, it cannot be reversed.
It is there forever until the world ends or there’s no more internet.
Compared to money, anyone could cheat you by refusing to pay back what they owed you, or denying that you already paid them, or pass you fake notes — the list of fraudulent possibilities goes on.
How did people initially earn Bitcoin?
Another buzzword — “mining”. Granted, they did not use a pickaxe and literally mined Bitcoins from the Earth. They mined it through computers.. without a pickaxe.
The hardworking people who worked on the blockchain to update it every 10 minutes with all the transactions that are going around — these are your friendly neighbourhood miners. And they get paid to update the blockchain.
Can miners hack the blockchain and take away my Bitcoin?
This is only possible if a large group of miners came together to form a 51% majority of the total computing power to disrupt the blockchain.
However, this is limited. They cannot go into your digital wallet and suck out your Bitcoins. Because as mentioned above, nobody can change whatever has happened on the Blockchain. The 51% hackers can only create false updates to the Blockchain — so it seems like someone has already sent you 1 BTC and it seems like it has been confirmed on the Blockchain… except it’s not. It shows “confirmed” but in reality you didn’t get the BTC. The hackers can only affect future transactions.
This is why it’s quite stupid and pointless for miners to put so much effort into organising a large group to perform a 51% “hack”, because they cannot steal Bitcoins nor alter the past transactions on the blockchain. They can only try to fake future transactions.
Either way — if that were to happen 1 day, people will find out instantly that they have been cheated and the entire community will know within a day. So you wouldn’t lose alot anyway…
The invention of blockchain has spawned many other coins, termed “Altcoins”.
Most of the processes, which does apply to just money alone, can be used for any other industry. It uses the same logic as blockchain. Stay tuned for more updates as we move on to talk about the top altcoins that aim to change the future.