What Is Bitcoin? The Definitive Beginner’s Guide [2020]

You probably heard of Bitcoin for the first time a long time ago. 

But still, in 2020, you’re always wondering: What is Bitcoin?

That's normal. Bitcoin is challenging for anyone to understand in the first place. 

Don’t worry. My article is exhaustive -- but not exhausting!

It’s full of metaphors, stories, and explanations to help anyone learn and understand what Bitcoin is. 

In the article, I will answer questions like:

  • What makes Bitcoin different and unique? 
  • What are its purposes? 
  • What are its benefits and drawbacks vs traditional currencies?
  • What makes it a solid investment? 

And many more. 

Let’s get started!

  • #1 What is Bitcoin, Simply Explained (2 Minutes)

    One of my fellow crypto maniaks said this: 

    “When you decide to learn about Bitcoin, you are making a choice to expose yourself to a different way of thinking.”

    That’s true. Bitcoin is different from anything else that has been created in the past. 

    It’s new.

    Bitcoin (BTC) is a digital currency, or cryptocurrency, which is used by millions of people around the world. 

    Source: BTC.com YouTube Channel
     

    It’s built on cryptography, and its main feature is its decentralization

    For the first time, you can store value and transfer value without any 3rd party acting as an intermediary.

    3rd parties like the central bank, financial institutions, etc.

    You only rely on technology and math. And you have complete autonomy over your money. 

    This comes with many benefits. To name a few:

    • You aren’t reliant on banks anymore to store/transfer value. 
    • You can do anything you want with your money, nobody will have a say about it. 
    • You can send value anywhere with almost no fee, instantly. 
    • Your government won’t print it at any time without notice, deflating its value. 

    There are drawbacks as well:

    • Nobody’s here to protect you if you send BTC to the wrong person. 
    • Bitcoin’s value is mostly based on supply and demand, which makes it more volatile than conventional fiat money. 

    To sum it up, Bitcoin has all the properties needed to disrupt the economy.

    But will it? 

  • #2 The History of Bitcoin - Key Dates

    Rome wasn’t built in a day -- and neither was Bitcoin.

    Here’s a quick history lesson about the king of cryptocurrency.

    • 2005 - Before Bitcoin...Bitgold was proposed. 
    • 2008 - Bitcoin’s Whitepaper is Published
    • 2009 - Bitcoin is Launched
    • 2010 - 10,000 Bitcoins buy 2 Pizzas.
    • 2011 - U.S. Dollar Parity 
    • 2013 - The First Bitcoin Bubble. Bitcoin’s price reached $1,213
    • 2014 - Mt. Gox suddenly got shut down and China banned Bitcoin
    • 2015 - Ethereum is created and competes with Bitcoin.
    • 2017 - Bitcoin’s Biggest Bubble: Bitcoin’s price reached $19,787.
    • 2018 - Bitcoin’s Low Point. Bitcoin’s price reached $3,300.
    • 2020 - CoronaVirus vs. Bitcoin. Bitcoin’s price lost ~ 60% for a few hours.
    Find out more about the History of Bitcoin.
  • #3 What Does a Bitcoin Look Like, Anyway?

    No question is too silly for this article. 

    Some people, after asking “what is Bitcoin?” then ask the question “is it an actual, physical coin?”

    The question is no laughing matter. 

    A man in New York conned people out of $1.1 million dollars

    He took Chuck E. Cheese tokens (physical coins from a children’s arcade), wrote the letter B on them, and sold them to people on the streets.

    The answer is: No, Bitcoins are not physical.

    Bitcoin lives completely online. 

    That said, you can store your Bitcoins and other cryptocurrencies offline (where it’s safer). 

    The safest way to do that is by purchasing a hardware wallet.

    Actual hardware wallets.
     

    These wallets hold Bitcoin and many other cryptocurrencies. 

    Once you learn how to use them properly and store them safely, they are as close to a physical Bitcoin as you’ll ever get. 

  • #4 12 Features Giving Bitcoin Value

    There are so many factors that give Bitcoin value. 

    Some are technical and some are more about the market. 

    Let’s take a look at a few of them.
     

    Price vs. Value

    First, you need to understand the fundamental difference between price and value.

    The price of Bitcoin boils down to this: 

    Supply and demand. 

    Bitcoin gets its market price from belief.

    Beliefs will determine how much people are willing to buy Bitcoin and sell it.

    But that’s not the same thing as value.

    Bitcoin gets its value from its fundamental properties. 

    So, what are these properties that make people believe Bitcoin has value?
     

    A) Bitcoin uses blockchain technology

    Bitcoin is built on blockchain technology, and would be nothing without it. 

    In short, blockchain is digital proof. 

    Blockchain technology provides digital proof that something happened at a certain time, without any intermediary involved.

    For example, when Alice pays Bob a total of 0.00212 Bitcoin, the blockchain records that transaction and when it happened. 

    That data is stamped into the blockchain forever and can act as proof of the transaction. 

    Blockchain technology is the foundation of Bitcoin. Read our ultimate Blockchain 101 guide if you want to know more about it.

    B) Bitcoin is transparent

    There’s a famous saying in the Bitcoin community that is “don’t trust, verify.”

    When you’re using Bitcoin, you don’t need to trust any person, bank, or government.

    That’s because Bitcoin is fully transparent. 

    You, me, anyone can look at the Bitcoin blockchain and verify that a transaction happened. 

    We can verify what is happening and know it is free from manipulation. 
     

    C) Bitcoin is decentralized

    Bitcoin is decentralized

    That means that its core code and information is not stored on some central server or database where someone could hack it or manipulate the data.

    Bitcoin’s core code and ledger (database) are run on computers all around the world. 

    The same code runs on all sorts of different computers -- each one verifying and checking each other. 

    If someone tries to hack or manipulate some data, all the other computers around the world will check and reject the change.

    How does this benefit you, personally?

    Take for instance the time during the great depression; Democratic U.S. President Roosevelt imposed a “banking holiday” across all America. 

    No one could withdraw their money. It was stuck.

    The same thing has happened in modern times in Venezuela. 

    If you had your hard-earned money in the bank, you could no longer access it.

    That’s because banks are centralized. 

    With centralized systems, the power is not spread amongst its users.

    This is why the government or even the bank itself can lock you out.

    Decentralized organizations don’t have a central location, CEO, employees, or anything that would allow the government or anyone to lock them down.

    Bitcoin’s decentralization keeps the ownership of your Bitcoin 100% in your hands. 
     

    D) Bitcoin is pseudonymous 

    If you value financial privacy, then you can have it with Bitcoin.

    Bitcoin is pseudonymous. That means it is not quite anonymous, or at least that you would need to work hard to use it anonymously.

    All Bitcoin addresses are strings of letters and numbers. They are not linked to your identity directly, like a bank account. 

    For example, a typical bank account number might be: 1001001234

    The only way you can get it is if you sign up with a bank, which requires submitting your ID, passport, or other approved identification documents. 

    Then, all your financial history is accessible by the bank and can be shown to the government, the police, a lawyer, etc.

    A Bitcoin address looks like this:

    When you use a Bitcoin wallet generator, you can make those addresses and keys yourself quite easily. No account setups or ID checks required. 

    Still, there are companies out there that have the experience and skills to track Bitcoin’s movements across the blockchain.

    They can do it because the Bitcoin blockchain is transparent. So they take a look and trace where the money flows. 

    If the money flows to something linked with your identity, then they can pin it on you. 

    If you want to use Bitcoin anonymously, you should make sure to never link your public key/address with any transfers or items linked to your identity. 

    Note: since the creation of Bitcoin, new cryptocurrencies focused on privacy have emerged, like Monero, Zcash, and Beam. 
     

    E) Bitcoin is divisible

    One of the great benefits of Bitcoin is that it’s divisible, like old fiat money. 

    Fiat money like the U.S. Dollar or the Euro can be divided into only 2 decimal points: 1.00

    Bitcoin can be divided into 8 decimal points: 0.00000001 BTC.

    The smallest unit of Bitcoin, 0.00000001 BTC, is often called a Satoshi, in honor of the inventor.
     

    F) Bitcoin is uncensorable

    Bitcoin cannot be censored.

    China was the first country to ban Bitcoin in 2013. 

    Since then, China has gone through periods of banning it, allowing it, regulating things like exchanges, mining, and ICOs

    Other countries have also gone through different phases of Bitcoin regulation

    But even when China banned Bitcoin mining, there were people mining it

    This is because all Bitcoin needs to function is electricity and an internet connection. 

    There is no company to sanction and no CEO to fine or put into prison. 

    The only way for the government to censor Bitcoin is to invade everyone’s home and take away their computer. 
     

    G) Bitcoin is global

    Bitcoin is a global phenomenon. 

    Over 260,000 transactions happen every day. That’s over three transactions per second!

    There are an estimated 150,000 Bitcoin miners around the world securing the Bitcoin blockchain. 

    Someone moved $445 million dollars worth of Bitcoin for a $0.25 fee, within a few minutes!

    Source: blockchain.com
     

    There are over 10,000 Bitcoin ATMs in over 100 countries around the world. 

    You can go to any of those 84 countries in the world and use these ATMs
     

    H) Bitcoin is Portable

    Bitcoin can be global only because it is lightweight.

    The utility of fiat currency is your ability to stuff a few dollar bills in your pocket and go to the corner store to buy a soda. 

    The utility of gold is your ability to lock it away in a vault and keep it safe in case something happens to the economy.

    To transport $100,000 in gold, you would need to carry around a very heavy brick of it.

    But all you need to carry around $100,000 in Bitcoin is a single piece of paper, or your phone, or a hardware wallet

    You can then spend only a small portion of it, just like cash.

    All you need to use Bitcoin is an internet connection to transfer it to anyone, anywhere in the world, at any time you want.

    Plus, with Bitcoin exchanges like Coinbase and Kraken, you can easily buy Bitcoin with just a few clicks. 
     

    I) Bitcoin is and will be scarce

    There will only ever be 21 million Bitcoin to ever exist. 

    People believe Bitcoin has value because they know it has a finite supply that cannot be changed. 

    They know that if everyone in the world could own an equal amount of Bitcoins, there would only be enough for each person to own 0.0028 BTC.

    That means if you own more than 0.0028 BTC, you own more of that scarcity. 
     

    J) Inflation predictiability 

    Gold gets its value from being scarce. But that scarcity is not predictable. 

    No one knows if there will suddenly be another San Francisco gold rush where tons and tons of gold were discovered in the hills and mountains. 

    That event quickly increased the gold supply and put pressure on prices.

    Bitcoin supply is carefully calculated to only emit more BTC once every ten minutes. That’s not something that can be changed.

    Scarcity exists because new Bitcoins are being released according to a deflationary model.

    Every four years (like in May 2020), a Bitcoin halving takes place.

    These halvings will keep occurring until the last Bitcoin is mined in the year 2140. 

    This model helps Bitcoin gain adoption while keeping prices as stable as possible.
     

    K) Bitcoin is Durable

    Because it lives on the web, Bitcoin is infinitely durable. 

    This means that users can spend a Bitcoin an infinite number of times without it ever wearing out. 
     

    L) Bitcoin is not Counterfeitable

    For as long as paper money and metal coins have existed, there have been counterfeits of them

    Bitcoin cannot be counterfeited. 

    That’s a driving force of value because it inspires trust in the system. 

    The Bitcoin blockchain makes sure that no counterfeit Bitcoins are introduced into the system. 

    Bitcoin has even more properties than this. Find out What Gives Bitcoin Value (20 Reasons -- Simply Explained). 
  • #5 The 5 Concrete Benefits of Bitcoin

    Okay, you’ve learned more about what Bitcoin is. 

    But when it comes to things that really matter, what is Bitcoin, exactly? 

    What are some real, everyday benefits for you? 

    Let’s take a look. 
     

    A) Financial Privacy (aka Private Consumption)

    Remember Bitcoin’s pseudonymous properties. You can have financial privacy by using Bitcoin properly. 

    For example, if you’re into Bitcoin betting, you can gamble on sports without fear of your bank, spouse, or government (if gambling is illegal where you live) finding out. 

    Or if you simply don’t want your hard-earned money to be monitored by your bank, with your spending habits sold to advertising agencies.

    Or if the government is banning cash transactions (like the U.S. could ban cash over $10,000), and you want to keep your financial privacy -- then Bitcoin is your answer. 
     

    B) Faster, Cheaper Remittance (Sending Money Abroad)

    If you send money to friends or family in another country, those costs can stack up very high very quickly. 

    Banks often charge $50 or more to send your money abroad, and it will take 2-5 days. 

    Bitcoin transfer fees (paid to miners) are $0.50 on average and take 10 minutes to a few hours at most. 

    That’s a big difference that keeps more of your hard-earned money in your own pocket, not a bank’s vault. 
     

    C) 24/7 Speculation

    The New York Stock Exchange is open from 9:30 am to 4 pm, Monday to Friday, Eastern Time. 

    Those are the only times you’re able to trade. 

    On the other hand, cryptocurrency exchanges (like Coinbase) allow you to trade anytime you want, 24/7.

    Ideal for speculators who would rather set their own schedule, work from home when they want, or be flexible in general. 
     

    D) Non-Confiscatable

    A bad lawsuit can put a lien on your house that you must repay before selling the house. 

    Bad credit loans can garnish your bank account, taking money directly from you. 

    Even gold can be forcibly stolen or taken from you.

    But if you have Bitcoin, and only you know your private key, then no one can take it away from you. 
     

    E) Bitcoin Could Make You Money

    You can’t argue with facts. Since 2009, the price of Bitcoin has experienced a parabolic uptrend.

    Many people who argue that it’s unstable simply haven’t zoomed out far enough.

    Zooming out, we see a clear uptrend from under $0.01 to where it is today.

    A $50 investment in 2009 would have netted you $100 Million at Bitcoin’s peak in 2017.

    You might think the price in 2017 was Bitcoin’s final “peak,” but the majority of people thought the same thing in 2011 at the ‘peak’ of $200 and in 2013 at the ‘peak’ of $1400.

    And even if you bought during those peaks and never sold... at today’s prices you’d still be in profit.

    Hesitant to Invest in Bitcoin? Find out whether or not You Should Buy Bitcoin.
  • #6 The 4 Concrete Drawbacks of Bitcoin

    Despite all Bitcoin’s benefits, it’s NOT a miracle cure. 

    It isn’t the magic solution to everything and, in all honesty, it’s not for everyone. 

    Here are some drawbacks that you should think about before buying any BTC
     

    A) Bitcoin can be used by scammers 

    The fact that Bitcoin is non-confiscatable is a big positive. You don’t want anyone taking it from you without permission. 

    But for some people, it’s a negative. Because it also means you can’t get it back.

    If you’re scammed, you can’t ask for a chargeback, like with your credit card.

    Also, since Bitcoin is partly anonymous, finding who scammed you and suing them is next to impossible. 

    Authorities have also found it difficult to pursue cases of crypto fraud.

    So be careful out there. 
     

    B) Volatility

    Bitcoin is only 10 years old. 

    The cryptocurrency market is still immature, and prices are highly volatile. 

    Let’s be honest; some people are too emotional to handle it.

    Source: twitter.com
     

    Before you jump in, be reasonable when deciding how much to invest in Bitcoin

    Consider your financial situation and risk tolerance before diving in.

    And most importantly: 

    Don’t spend more than you’re comfortable losing. 

    If you spend more than you’re comfortable with, then Bitcoin’s volatility might play on your emotions. 

    You’ll lose money because you’ll make dozens of the 50 most common mistakes cryptocurrency investors make. 

    For more information on these mistakes, check out our ultimate Bitcoin investing strategy guide. 

    C) Not the Most Beginner-Friendly

    These days, trading and using Bitcoin isn’t the most beginner-friendly activity. 

    Remember that Bitcoin doesn’t allow any chargebacks. 

    If you send your BTC to a legitimate seller but you type in the wrong address, your funds are lost forever. The seller can’t help you get them back. 

    If you sent them from an exchange, they can’t help you get your funds back. Neither can your wallet provider. 

    Perhaps this issue could be resolved over time, but currently, there are no chargebacks, changes, or transfer freezes. 
     

    D) Can’t be spent everywhere

    The news used to shout that Bitcoin proponents wanted to be able to spend their Bitcoin everywhere.

    They wanted everyone to be able to buy a cup of coffee with their Bitcoin. 

    But even though there are over 10,000 Bitcoin ATMs around the world, it’s still tough to use your BTC to buy normal, everyday things. 

    Currently, the easiest way to spend your Bitcoin is to order some of the best Bitcoin cards out there.

    Basically, the card providers will provide you with an address to deposit BTC. 

    Then, when you use your card to make a purchase, they will automatically convert some of your BTC into fiat money to cover the price of the purchase.

    Although Bitcoin cards make it convenient to spend your Bitcoin, it’s not so easy to find merchants accepting BTC.

    This will likely change in the next ten years, but at the moment, it’s best not to count on spending your Bitcoin on a regular basis. 

  • #7 Bitcoin: Currency, Store Of Value, Or New Asset Class?

    So, is Bitcoin a currency? 

    A store of value, like digital gold? 

    Or perhaps, is Bitcoin a new asset class like stocks?

    A) Is Bitcoin a currency?

    Yes. 

    You can buy things with BTC. You can sell things. You can receive your salary in BTC. 

    Each Bitcoin can be divided into 8 decimal places. 

    So if something costs 0.0005 BTC but you only have 1 whole BTC, you can still buy it and get 0.9995 BTC back in change. 
     

    B) Is Bitcoin like digital gold?

    Somehow, yes. 

    Gold is also limited in supply. 

    We don’t know how much gold is really out there, but we do know it’s limited. 

    A limited supply, with steady or increasing demand, keeps prices strong.

    Bitcoin is limited in supply. 

    There will only ever be 21 million Bitcoin to ever exist. 

    Plus, they’re being released according to a deflationary model.

    The Bitcoin deflationary model works like this:

    Every 10 minutes, 12.5 BTC are released.

    Every four years (like in May 2020), a Bitcoin halving will take place.

    After the halving, 6.25 BTC will be released every 10 minutes.

    Then, in 2024, another halving will take place, and only 3.125 BTC will be released.

    These halvings will keep occurring until the last Bitcoin is mined in the year 2140. 

    Less inflation means fewer new Bitcoins on the market, thus less supply than traditional fiat currencies.

    This model helps Bitcoin gain adoption while keeping prices as stable as possible.
     

    C) Is Bitcoin a new asset class like stocks?

    Yes. 

    The majority of people who buy stocks are speculating. They’re guessing/hoping that prices go up. 

    Pension funds buy steady stocks hoping they will slowly go up, so people have something to retire on.

    Risky traders buy penny stocks or cheap but risky stocks, hoping they skyrocket in value.

    Since Bitcoin’s price varies regularly, most of the people who buy Bitcoin are also speculating, hoping prices will rise over the months or years. 
     

    So, what is Bitcoin?

    Bitcoin is new. 

    It has the properties of different traditional assets. 

    And only time will truly tell what Bitcoin ends up being.

  • #8 What makes Bitcoin go up/down?

    At the end of the day, when you see the price going up and down, it’s because of supply and demand.

    You’ve seen that Bitcoin’s supply of new Bitcoins is fixed. 

    Every 10 minutes, more are produced, until all 21 million are created.

    This is regulated by the halving, which occurs every four years. 

    But the overall supply is still up to people and companies in the markets. 

    In 2019, for example, the price of Bitcoin started fluctuating a lot. 

    A few clever people scanned the blockchain and figured out that as much as 13,000 BTC were being dumped on the market every week. 

    They figured out that a scam called the PlusToken scam was dumping its ill-gotten gains on the market, causing downward price pressure from the big supply they were dumping. 

    The prices dropped because demand simply couldn’t keep up with supply.

    On the other hand, in 2017, when prices were going up, Coinbase reported signing up as many as 25,000 people per day. 

    The demand was outpacing supply.

    Remember: the price of Bitcoin is the reflection of supply vs. demand. 
     

    What’s a Bitcoin worth right now?

    Bitcoin is volatile.

    The way it goes up and down every day will make even the most seasoned stock brokers head spin. 

    But things are calming down compared to the wild days of 2010-2013. 

    Here’s the current price:

     

     

    Keep in mind that you may not get that price unless you’re buying or selling at one of the best cryptocurrency exchanges

    If you’re buying or selling Bitcoin from small exchanges or P2P, you’ll likely need to add on a premium.

  • #9 How do I Invest in Bitcoin?

    Now that you know what Bitcoin is, you’re probably wondering whether or not you should invest in Bitcoin.

    If you’re ready to buy a few bits, there are a few great options. 

    They are all outlined in our definitive guide: The Best Ways to Buy Bitcoin

    For your security, I strongly recommend that you use one of the platforms we recommend in this guide. 

    Whether you’d like to buy Bitcoin with a credit card, with your bank account, in a few minutes, with the minimum possible fee … This guide will get you covered. 

    And if you have no idea how the process of buying Bitcoin is like, check out our ultimate guide on How to Invest in Bitcoin in 5 Simple Steps.

  • #10 Charges Against Bitcoin: Are They Deserved?

    Let’s be honest; there are a number of influential people who, when asked “what is Bitcoin?” would immediately yell “Bitcoin is a scam!”

    Indeed, there’s an extensive list of charges against Bitcoin. 

    Let’s not hide them under the rug. Let’s look at them and see if they are deserved.
     

    A) Bitcoin helps illegal activity prosper.

    This charge against Bitcoin is valid. 

    A Forbes article reports that as much as $70 million worth of illegal activity (gun sales, drug sales, etc) is funneled through Bitcoin every year. 

    However, the same article points out that all that activity can be traced, and in fact, is being tracked by law enforcement. 

    Unlike cash, every transaction in Bitcoin is permanently recorded and can be linked with other Bitcoin activity. 

    That means that as soon as law enforcement links a Bitcoin wallet used for illegal activity to someone in real life -- then the law has records to prove the illegal activity. 

    Still, $70 million is a drop in the bucket compared to the $100 billion in cash used for illegal drugs annually. 

    And that’s only on drugs.
     

    B) Bitcoin mining uses as much electricity as a small country

    The charge that Bitcoin wastes too much energy is valid. 

    A BBC article compares Bitcoin’s mining electricity usage to that of Switzerland. 

    That may seem like a big waste. And it is. 

    But only in the same sense as all electricity usage should be minimized. 

    We should all strive for renewable, better sources of energy. 

    After all, did you know that traditional banking consumes 3x as much energy?

    That’s right. According to Kelly-Pitou, a clean energy technology researcher at the University of Pittsburgh:

    “Banking alone consumes an estimated 100 terawatts. This is a little bit more than three times the energy Bitcoin mining consumes.”

    And it makes sense when you think about banks and credit card providers needing to run brick-and-mortar offices, server farms, and so much more equipment that centralized financial providers need to run in order to function.
     

    C) Bitcoin price is way too volatile

    Unfortunately for critics, Bitcoin’s price volatility cannot be used as a charge against it. 

    Because for some people, like speculators, the volatility is incredible; it means they can earn money by speculating on the ups and downs.

    Granted, most people are not speculators. 

    Most people think that Bitcoin is either like cash or gold. 

    When they learn how volatile it is, they believe people like Warren Buffet and Charlie Munger who call Bitcoin “a tulip mania” and “worthless.”

    But then, what about stocks? Some stocks have gone up and down by over 1000% on a regular basis.

    Should we throw them out too?

    Bitcoin is volatile. That’s true.

    But Bitcoin is a new market that is slowly maturing. 
     

    D) Bitcoin is a bubble

    This charge against Bitcoin has been around since its start. 

    In fact, the Bitcoin “bubble” has already “popped” about six times. 

    2011 -- $31 down to $2

    2012 -- $266 down to $100

    2013 -- $1,242 down to $230

    2015 -- $760 down to $200

    2017 -- $19,400 down to $3,300

    2019 -- $14,400 down to $3,800

    So it begs the question … is Bitcoin really a bubble if it keeps popping?

    After all, the definition of a bubble, like a soap bubble, is that once it pops, it’s gone forever.

    You can’t re-inflate a popped soap bubble.

    Instead, what we could be seeing is Bitcoin emerging as a new asset class. 

    And like all new things, it’s going through some growing pains. 

    After all, when the internet sent dotcom stocks soaring by 1000% -- and then popped, did we stop using the internet? 

    Not at all. It just grew bigger.

    Similarly, Bitcoin and cryptocurrencies, in general, may be part of a whole new asset class.

    Want to know more about the charges against Bitcoin? Read The Truth About Bitcoin’s Future.
  • #11 How Does Bitcoin Work? [Technology explained]

    How does Bitcoin work, anyway?

    Bitcoin is built on a blockchain.

    You may have heard that word before: blockchain. 

    It’s the secret sauce; the magic technology behind Bitcoin. 

    If Bitcoin was a car, imagine blockchain as the roads that allow Bitcoin to travel from one user to another.

    Source: TheGuardian YouTube Channel
     

    But it’s not that magical. 

    While the technology is revolutionary and now used by the biggest companies in the world -- it’s actually quite boring. 

    Blockchain is exactly as it sounds: a chain of blocks.

    Blocks contain digital information. In the case of Bitcoin’s blockchain, that’s your transaction data: date, amount, etc. 

    The chain is maintained by a network of computers that can be located all over the world.

    This network maintains the ledger of all the digital information together. 

    This network ensures that the ledger won’t be hacked, taken over, or scammed.

    Because the network is decentralized, it’s almost impossible to hack the ledger.

    Indeed, the hackers would need to successfully hack 51% or more of the network in a 51% attack

    Of course, blockchain technology is much more complicated and evolved than this simple explanation. 

    Since this is a beginner’s guide on what Bitcoin is, I wanted to keep the information here beginners-friendly. 

    If you would like to know more, check out our ultimate guide on What is Blockchain Technology.
  • #12 How Many People Own Bitcoin?

    According to one of the largest surveys conducted, 78% of Americans have heard of Bitcoin at least once. Only 6% hold the digital currency.

    Another survey showed even more interesting data when age demographics are taken into consideration. 

    It turns out that 68.8% of people between 55 and 64 years old do NOT plan on buying any Bitcoin. 

    That increases with age. 74% of people over 65 refuse to buy Bitcoin.

    That’s in contrast to younger generations, where not only do 24 to 35 years olds plan on buying it, but 8.8% already own some. 

    The demographics were divided further when isolating male and female responders.

    11.6% of young males planned to buy BTC, whereas 8.2% of females were planning to do the same. 

    The statistics don’t lie. 

    They show that most people still think buying Bitcoin is difficult and risky.

    But the truth is: buying Bitcoin is not difficult, especially this year.

    These days, the best Bitcoin exchanges each have a high level of security, high liquidity and low fees.

  • #13 Where Can I Spend Bitcoin?

    Currencies need to be accepted in order to function.

    Bitcoin is a currency that can be spent. 

    In fact, we compiled dozens of quality places where you can spend Bitcoin.

    You can find everything from toilet paper to N95 masks. From trinkets to necessary household items. 

    You can also bet on sports with Bitcoin or play on Bitcoin casinos if you’re an amateur. 

    But be warned: you can’t buy everyday things on a regular basis with Bitcoin. 

    At least, without a Bitcoin debit card.

    Plus, you can’t pay your taxes or utilities directly with Bitcoin. 

    Bitcoin is not the currency of the future just yet. 
     

  • So, What is Bitcoin? It’s a New Era of Money.

    Not all revolutions need to end in war. 

    Bitcoin is the start of a financial revolution. 

    New methods of using money, thinking about money, and transferring value across the world have been invented back in 2009 with Bitcoin.

    Thanks for reading this article up to its end!

    What’s the most important point of this article? What makes Bitcoin unique, in your opinion? 

    Let me know your thoughts in the comments!

Posted by Summer B.

Summer Brochtrup is a freelance Android Developer, cryptocurrency researcher, and blog writer. She's been to over 40 countries, speaks 4 languages (to various degrees of fluency), and enjoys learning about AI, blockchain, and the way these are changing our world every day.

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We are CryptoManiaks.  Collectively, we have over 25 years of experience in the crypto world and are all passionate about guiding people through the complex world of crypto investing.

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