What Is Bitcoin? – How It Works and How To Get Them

What Is Bitcoin? – How It Works and How To Get Them


With all the media hype around Bitcoin, many
people are asking what it is? Basically, Bitcoin is just like any other
currency like the United States Dollar, Euro, Pound or New Zealand Dollar. However, there is one big difference, it’s
completely decentralised. Wait, wait, wait.. What is decentralised? Decentralised just means nothing is controlled
or managed in one place. Unlike traditional currencies transactions,
management or any repository of information is not stored under one system, but by using
many different people and computers to maintain the system all over the world. Think of it this way, under traditional currencies
all data around it is managed by a central ledger system which all transactions must
go through before any money is exchanged. The difference with Bitcoin however is instead
of being processed by a central system the money will go straight to the person or business
you’re trying to give money to. Okay, what’s the pros about having a decentralised
system?Or traditional one seems to be doing fine isnt it? Well.. By having a system that can to straight to
the other person or business it will have much less administration costs, so for you
fees are much lower. Other benefits are that you can use the currency
anywhere in the world which is a big bonus if you travel a lot, or do any online shopping
as conversion rates can really kill your bank account. Last but not least, your account can’t be
frozen by any government or anybody else. Which might be one of the many reasons it’s
the goto currency for online underground markets such as the deep web. So.. How does Bitcoin work? Well.. this part might blow your mind but,
currency is imaginary. Now before you click off this video calling
me crazy just hear me out. Currency is imaginary, now of course if you
take a dollar bill out of your wallet it’s tangible, you can touch it, feel it, you know
it’s a dollar because it has the dollar sign at the top and George Washingtons face on
it if you’re American. But why is that paper in itself worth much
less than what what’s actually printed on it it’s because people have put their trust
into it and have come together as a society and said that this is what we will use in
exchange for goods and services. That’s why Bitcoin can be a thing, I mean,
it’s not real. Not tangible. You can’t feel it, but it’s there. You can buy things with it, so.. if it’s not
real how can you buy things with it? – Because people have put their faith into
it, which is also why it’s so volatile, but we’ll get into that in another video. So I just wanted to get that out of the way
of why Bitcoin works, but how it works is a little more complicated but will mess with
your sense of reality a little less, I mean I don’t want to Matrix you too much. How Bitcoin works is around the fact it’s
a cryptocurrency, which means it’s encoded in such a way that means the coin cannot be
copied. This is because if it could be that would
devalue the currency as people would be printing as many Bitcoins as possible. Which would make it less trustworthy so people
wouldn’t buy into it and the value would collapse. As we talked about with the central ledger
system before and how Bitcoin doesn’t go down the same path this is where their system of
Blockchains comes into play. These Blockchains act like a ledger which
is coded onto the Bitcoin itself. The reason why this Blockchain ledger system
is so important, or any ledger system at all is to ensure that no single coin can be spent
more than once before going to its intended original recipient. Otherwise people would buy as many things
as possible with the same coin, but only the person who sold the original purchase would
actually receive any money, which would be a pretty serious problem. I know i’ve got you excited about what Bitcoin
is, so.. how do you get it? Well.. there are actually quite a few ways
to posses Bitcoins. The first way, is to simply exchange your
countries currency such as the U.S Dollar, Euro etc. for Bitcoins. As of the 23rd of January 2017, which is when
I’m making this video you can purchase one Bitcoin for $935.31 USD. That’s pretty expensive, and I bet you’re
wishing you bought some back a few years ago when they were only $200 each in both 2015
and in 2013, this just shows how volatile the currency really is. The other way to generate Bitcoins is to mine
them. Now, when I say the word mining you probably
think back to when people would load up their horses with equipment and travel thousands
of miles on foot and hit rocks until gold magically fell out. And actually, Bitcoin mining is kind of similar. But instead of waving a picaxe around your
room hoping to rip a hole where your wifi is so Bitcoins will fall out, you use special
software that uses your computers hardware to solve extremely complex math problems to
essentially earn Bitcoins for the value you provide for the Blockchain ledger system. But that’s a little complex, so we will do
a video dedicated to explaining Bitcoin mining to help you understand. And the last way, sell products or services
and accept Bitcoin. Hey guys and girls, thanks for watching. I would like to thank our actors Fred the
main man, Vanessa the business women, Ghosty the ghost, Vlad the vampire, Valerie the seller
and Monty the miner. If you like this video, give it a thumbs up
don’t forget to share it with your friends, remember, sharing is caring. We’ve got a ton of plans for this channel
so be sure to stay up to date by subscribing. Thanks! 🙂

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