Introduction to Bitcoin
When I first heard about Bitcoin I wanted to learn more, and I wanted to understand the logic behind it. So as most of us do these days, I turned to Google. In all honesty, I didn’t find anything that explained it in layman’s terms, nothing that gave me that “ah ha, I got it!” moment. It was only after lengthy reading around the subject that finally, the penny dropped! And so now, I will attempt to explain as succinctly as possible what Bitcoin is and more importantly the answer to the question: what’s the point of Bitcoin? Once you understand this answer it’ll be plain sailing!
What is Bitcoin?
(Short answer below – detailed answer here)
Bitcoin, in short, is a peer-to-peer, digital crypto-currency. Peer-to-peer means decentralised: transactions are made directly between users and there’s no central authority involved like a bank. Digital means a digital file is used to record how many Bitcoins you own. Cryptography allows for users to digitally sign this file and therefore establish ownership of their Bitcoins.
What is the point of Bitcoin?
Or I could rephrase the question to ask: What purpose does Bitcoin serve? What is the crux of Bitcoin?
The short answer is: to provide Trust. Bitcoin is a peer-to-peer system that provides trust. It’s a trust protocol. It replaces the need for the trust-system usually provided by centralised institutions such as banks, payment institutions or credit card companies during digital money transactions. That’s the crux of it: a decentralised trust-system enabling digital currency to be transacted online with confidence.