The Beginners Guide to Bitcoin, Cryptocurrency, and Blockchain (and why you should care)

You’ve probably heard of Bitcoin. Perhaps you even took some time to look into it. After all, people have literally become rich overnight because of it.

But, if you are like most people I know, you quickly got lost in the terminology and technical mumbo-jumbo. You may have committed to learn more later. I’ll admit to doing the same 6 years ago when a friend introduced me to Bitcoin for the first time.

This is the first post of a multipart series to help the average Joe get educated. The series will end with an explaination of how the technology will literally change the world. Yes, you heard that right. Like it or not, Bitcoin will impact of your life.

So, lets get started with the basics.

1. What is cryptocurrency? Keeping it simple, cryptocurrency is digital money. There are no paper bills like the Dollar or Euro. It is always electronic.
2. So, what is Bitcoin? Bitcoin was the first-ever cryptocurrency.

Now, you may be asking why we need cryptocurrency? We already have credit cards, Apple Pay, electronic banking, etc. And, by the way, isn’t all this digital money just another form of cryptocurrency?

Simply put, no. Digital transactions of paper money are not cryptocurrencies.

Let us review and introduce a few new topics:

1. Bitcoin is a type of cryptocurrency that records transactions on a blockchain.
2. Today, there are literally thousands of cryptocurrencies with more coming into existence each day. Bitcoin is the most highly valued of all cryptocurrencies.

Ok, wait. What is a blockchain?

In the case of Bitcoin, the blockchain is where the history of digital transactions are recorded. It is similar to a bank statement except that it keeps the history of all transactions made by everyone for all time.

Anyone and everyone can see any and all digital transactions that have occurred. This is why a blockchain is sometimes referred to as a public ledger. Instead of a bank or company controlling the data, the information is free for all to see. This builds trust and discourages fraud.

For example;

On January 1st Jane paid Brian 1 Bitcoin. On January 2nd Brian paid Mark 1 Bitcoin. On January 3rd Mark paid Amy 1 Bitcoin.

The inaccuracy with this example is that on the blockchain, we don’t know people’s names. We only know their address. This is how the blockchain builds privacy and is where we will pick up next week.

The next post in this multipart series will be linked here once released.

About the author: Jason Rohlfing is a founder behind rencoin.io. The Ren Coin organization is working to change the way society values our children’s education using blockchain technology.