What is Bitcoin in simple terms?
Alright, first things first – until fairly recently I admit that I was totally bamboozled by bitcoin, virtual currencies, decentralised ledgers and the difference between a blockchain and a block. Everyone in the financial services industry (literally) is talking about these buzz words and concepts such as mining so for me it was important to understand what they are all talking about!! In my quest to plug the knowledge gap I went on a reading spree, and in this post I will share those articles and videos that helped me gain a good level of understanding. I found that some articles simply confused me further, and as a result have highlighted these particular posts because they truly explain in layman’s terms what you need to know about bitcoin and the blockchain technology. Since these articles have helped me, I’m sure they can and will help you too – so here goes….
1. Bitcoin Explained – For a 5 Year Old
The guys at Coindesk provide a fantastic and simple explanation at Still Don’t Get Bitcoin? Here’s an Explanation Even a Five-Year-Old Will Understand. The Bitcoin explanation via real world apples and digital apples is genius, and is a great start point because they simplify all of the terminology so that YOU can understand it and relate to it. What I found myself doing was referencing back to this article and relating bitcoin details back to apples — I know, I don’t get out much!
2. Bitcoin Explained – For your Grandmother
How to Explain Bitcoin to your Grandmother is an excellent, and humorous, article by Brett Scott. Here Scott relates all of the key bitcoin buzz words with simple terms that we are all too familiar with such as cash, electronic banking, bank clerks and bank statements – if you know what those are, this article will help you understand bitcoin. Its brilliant, and probably one of the best articles on bitcoin that I have read – enough said!
3. Bitcoin Explained – How Does Bitcoin Work?
Next check out How Does Bitcoin Work? - The Bitcoin.org team start to talk about blockchain (balances), private keys (transactions) and mining (processing) at a high level. Its fairly simple and after reading the first 2 articles I mentioned this will start to make sense. By the way, the just over 1 minute video explanation on the home page is also pretty useful if you’re just getting started.
For a more detailed explanation – which should make more sense once you have gone through all of the recommended articles I have listed – check out Satoshi Nakamoto’s original Bitcoin: A Peer to Peer Electronic Cash System paper
4. Bitcoin Explained – By a Techie
Bitcoin: The Simplest Non-technical Explanation is a good final article to read. In this post the comparison with gold is made, and by the authors own admission the analogy is not perfect, but it makes the point. Read the article and then read the comments – it does get a bit techies, but is a good read for newbies.
5. Bitcoin Explained – Video’s…
After all that reading check out the following videos – don’t worry, they’re all about 3 minutes long:
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Actually, its all about Blockchain….
Recently the focus seems to have shifted from bitcoin to the block chain technology – the number of times people tell me that its no longer about bitcoin, more the underlying blockchain technology is driving me nuts. Its almost become a cliché! Anyway, the point is you need to understand how both the currency and the technology that drives it work. I hope this post helps you on your quest – good luck.
