Introduction to Bitcoin (Beginner #1)

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Presentation from Video

  • Bitcoin is both a currency and a payment system similar to Paypal.  It is “programmable money.”
  • Bitcoin is similar to e-mail.
    • Email:  Get an e-mail address and you can send and receive e-mail with a e-mail program.  A secret password allows you to send e-mail.
  • Bitcoin:  Get a Bitcoin address and you can send and receive bitcoins with a Bitcoin program (Bitcoin Wallet).  A secret password (Private Key) allows you to spend bitcoins.
  • Bitcoin is “decentralized”
    • Transaction database shared by peer-to-peer connections.
    • Transactions are person-to-person.
    • No central authority can force a refund.
    • Payments are verified and no chargebacks or forced refunds possible.
    • protects privacy if merchants don’t need to collect personal information to verify payment.
  • Bitcoin “mining” is done by specialized computers.
    • Records transactions and adds them to the database in “blocks.”
    • Miners keep transaction fees.
    • New currency is issued through “block rewards.”
  • Don’t need to know everything to be able to spend bitcoins just like you don’t need to know how the Federal Reserve and Central Banks work in order to spend cash.
  • Bitcoin purchases are similar to Paypal in that Bitcoin address is used instead of an e-mail address.

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