>> Bitcoin is the most popular cryptocurrency
with over six million users worldwide currently.
Bitcoin terminology can be confusing,
because the word Bitcoin is used to
signify three different things.
Bitcoin refers to the blockchain technology that it is built on,
the protocol that describes how assets are transferred,
and it also describes a cryptocurrency.
Let's jump into these three different parts,
and understand how it all works together.
Bitcoin was introduced in 2008,
by the mysterious Satoshi Nakamoto.
Nakamoto didn't want it to be the focus of the ecosystem,
so he stuck around long enough to explain everything,
and then he's remained fairly quiet ever since.
He does surface periodically to address specific issues,
but mostly wants the stakeholders to figure it
out on their own with the levers that he has provided.
Nakamoto introduced Bitcoin to the world in
a white paper with a complete description
of how the network would work.
It also included working code.
You can find that white paper at bitcoin.org/bitcoin.pdf.
It explains transactions, proof of
work incentives, simplified payment verification,
and more, with clear examples of how
each of these concepts work in the Bitcoin ecosystem.
I highly recommend giving it a read.
He did not invent Bitcoin,
rather combined e-cash mixed and proof of work capabilities,
ideas about how to transfer currency with Bitgoal,
B-money and Hashcash into the system called Bitcoin.
Bitcoin encourages people to participate in
the system response to changes in the dynamics of the system.
The system brings like-minded groups
together around a common vision,
and incentivizes people to participate.
Bitcoin solves the problem of centralization with
fiat currency by having a decentralized peer-to-peer network.
It has a public transaction ledger
that is transparent to the world.
It is straightforward to get started participating.
You can easily sign up with
their cryptocurrency exchange platform like cracking,
or Coinbase to buy Bitcoin.
Visit Bitcoin.org/buy, to learn more.
There are also peer-to-peer directories where you
can buy Bitcoin directly from sellers,
and ATMs which allow you to deposit and withdraw cash for Bitcoin.
You'll also need a wallet where you'll
keep your Bitcoin before buying any.
A Bitcoin wallet is essentially equivalent to a physical wallet.
It contains your currency and
public and private key so you can make purchases.
You can visit Bitcoin.org/ choose-your-wallet,
to choose the right wallet for you.
The platform allows anyone to sell or buy Bitcoin.
There will only be 21 million Bitcoin ever created.
Nakamoto decided to create a scarcity model so that
more can not be created arbitrarily like it is with fiat currency.
At this time in 2020,
nearly 19 million Bitcoin have already been minted.
This means there's only a couple
million Bitcoin left to be minted.
From this total of 21 million,
there are likely millions
left in circulation that will just be lost
forever because people have lost
their private keys, or passed way.
The price of Bitcoin continues to fluctuate over time
depending on several factors such as the supply and demand,
the number of competing cryptocurrencies,
and the cost of producing a Bitcoin through the mining process.
When Bitcoin first launched,
the price of one Bitcoin hovered at a few dollars.
In 2017, Bitcoin reached a peak of about $20,000 per one Bitcoin.
Now let's talk a little bit about transactions.
Bitcoin has a rule-base for validating
transactions using the Proof of Work algorithm.
Transactions take about 10 minutes to be verified,
and then the block there on gets added to the chain.
As the network grows and expands,
it responds and changes dynamically.
Over time, it has become exponentially more
difficult to solve the current block problem
and add a new block to the chain.
Plus there are many more miners with
much more powerful mining rigs.
Despite this, the system has adjusted so that it
still always takes about 10 minutes to add new blocks.
I'll talk more about the mining process in a later video.
Bitcoin solves the problem of
double-spending with money being spent twice.
If a malicious user tries to spend the same bitcoins to
two different people at the same time, this is double-spending.
Bitcoin mining and the blockchain
are there to create a consensus on
the network about which of
the two transactions will confirm and be valid.
With Bitcoin, you can keep your identity anonymous with
public and private keys that represent your own unique account.
Those keys are stored in your wallet and give
you the right to spend your own Bitcoins.
When you make a transaction it is signed with your private key.
Despite all transactions being visible,
there is still a sense of anonymity because
there is no way for the world to guess your private key,
or trace it back to your identity.
There's a bit about the history of Bitcoin,
how it works, and how you can start participating in the network.
Bitcoin is really just a set of
technological and architectural designs to solve what are
more traditional economic issues with
cash and credit in approvable and solvable way.
Bitcoin was the first major use of blockchain technology.
It has grown wildly popular over the past decade,
and has revolutionized the blockchain world into thinking
about use cases past cryptocurrency.
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