How Does BitCoin Work?

Money is imaginary. Now I don’t mean that this printed piece of paper is make believe. I can feel its texture and the ink even smudges off on my fingers, but when you compare it to this other piece of paper, what’s really the difference? Well one is a recognized currency and the other isn’t. And the reason why? Well people agree that this piece of paper is a dollar and has value. That’s where money’s worth comes from. We all pretend it’s a currency. This is one reason why the digital currency Bitcoin appeals to some people. See it’s not tied to any political system or government so it’s not vulnerable to any of their failings like the economic collapse in 2008.

All it needs is for people to believe in it, but lately well, some people are having a crisis of faith. That’s why today on Brain Stuff we’re going to quickly establish some facts about Bitcoin to better inform your beliefs about it. Now basically it’s virtual money you can use to buy and sell things online and it mimics real world limited resources like gold for instance. It’s also a cryptocurrency meaning that it’s encrypted in a way that prevents it from being copied. See every Bitcoin transaction is recorded using a block chain. Now that information acts like a ledger that is encoded onto the Bitcoin itself. This prevents people from spending the same Bitcoin more than once since everyone else on the currency’s peer to peer network knows that it just was spent.

It’s essentially just a number associated with an internet address. You can store it on your phone or a hard drive until it’s used again. Now, here’s some ways you could acquire Bitcoins. Accept them as payment for goods and services, exchange them for a more traditional form of currency, or you can mine them. That’s right, like gold Bitcoins are mined. Not by old timing, grizzled prospectors, but by powerful computers and like gold the more people mine Bitcoins, the less there are to be found, so they become harder to find. So instead of physically mining with a pick ax you can attempt to solve math problems with a computer. Imagine the problem is something like x + y = 15. Now if you can figure out what x and y are, congratulations, you get a bitcoin. With little competition the problems are easier to solve but when more people join the search you’ve got a race and the problems get way more difficult, but as Bitcoin miners dwindle, the math problems will get easier again to ensure the flow is steady, their value is boosted, and they remain inflation proof. Not all have been mined yet and we expect they won’t be until around 2140.

So let’s say you heard all this and thought you know I want to grow up to be a professional Bitcoin miner and trader. Well there are a few risks you should probably know about first. For instance, because there’s no regulatory agency setting Bitcoin’s value it tends to fluctuate wildly. Another Bitcoin problem is security. Now actually the format itself is fine, but that doesn’t protect it from hackers who target the banks and exchanges that deal in Bitcoins. Again, this isn’t the fault of the currency. If a bank were robbed, you wouldn’t blame the dollar bill for getting stolen right? So Bitcoin has its slumps and for it to become widely used its volatility needs to settle down quite a bit. It’s currently a high risk currency that’s totally unpredictable and we didn’t even get into the mysterious identity of Bitcoin’s founder Satoshi Nakamoto. Now personally I think the biggest drawback to Bitcoin is that you just can’t make it rain..

If you have experiences with Bitcoin, let us know in the comments below. And let us know if there are any topics you’d like us to cover. I actually have another pile of them right over there. Really, I mean it’s just offscreen. So, the best part about this is I don’t even have to pick it up. We have interns to do that. See you guys later..

As found on Youtube

16 Comments on "How Does BitCoin Work?"

  1. My son introduced me to Crypto in late 2012. After doing a lot of researching Btc I felt strongly that It had a lot of growth and potential ahead of it. So my son and I built my 1st rig and I started mining in January 2013, pulled $5,000 from my IRA and bought Btc at $13.44 and have never looked back since. The sweetest sound that I’ve ever heard was the clink of my 1st mined Bitcoin way back when. That was as satisfying a note as there ever was on any musical scale. Nothing but happy days ahead since. Don’t get me wrong, there have been bumps in this Crypto highway, the demise of the Silk Road, Mt Gox, DAO hack to name a few but as a HOLDer (holding on for the long duration) not a HODLer (hanging on for dear life) and not day trading, has rewarded me with quite a decent profit. It just takes a lot of patience (Sisu) and doing your research with due diligence. I have since invested in Ethereum (Dec 2015), Monero (Jan 2016) and lately Omisego (July 2017) all purchased from some of my profits from Btc to go along with my newly acquired free Bch and recently free Omg. I’m currently operating 3 rigs equipped with 6 gpus each. 2 mining Eth and 1 Monero for now, all of which will be re-evaluated after Metropolis kicks in to see which direction I go from here. So I ‘m back to doing more research in order to help with my next moves but I’ll always be a strong believer in Ethereum which is where I’ve made my money so far. HOLDing on to the rest for now. Btc $5,000-10,000, Eth $2,500- 5,000, Monero $200-400, Omg $100-1,000 no one ever really knows but MY research says yes and so far MY research has not proven me wrong. Bought Btc at $13.44, Eth at .80, Monero at .48, Omg at .43 Bch for free. No where to go but up for me. Just biding my time. It’s taken me over 4 and a half years to get here but I’ve made over $4,000,000 so far with just my original investment plus the cost of my rigs and I’m still sitting on a lot more. Taking a position and HOLDing is where the real profit is and it isn’t going to happen overnight. So if you want aggravation and ulcers go ahead and day trade, try and beat the Market I wish you luck but the real money comes with Research, HOLDing and Patience. Hope this advice helps because in the long run what it all comes down to, its just Eths, You and Me hopefully making the right decisions, feel free to get in contact with me via raymondwalker37045 @ gmail .com, surely i will guide you on how to invest wisley in the cryptocurrencies that will make more profit at the monent

  2. Bought some Flash Coin today people.. I can’t be more excited!! But damn those guys need to hire a web designer

  3. Bought some Flash Coin today people.. I can’t be more excited!! But damn those guys need to hire a web designer

  4. People Check out FLASH on Coinomi and cryptopia. Only 100 mil market cap and price only 0.18 cents. You do the math if it hits 100bil Mcap.And it probably will. Web design is crackhouse worthy, but after rebranding wich is this month it will have lots of potential

  5. Sorry for spam but I really have suggeested FLASH about a week ago and now its 9x, people have to know about flash until it is so cheap and not even in top 100

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