What is a bitcoin?

#btc, #bitcoin, #cryptography, #security

A Bitcoin is a unit of electronic value. An afterthought might be, how do I make one? Well, the truth is, you can make lots of them quite simply with a few clicks (more on that later), but it's not exactly the same stuff. You see, to make a real Bitcoin, you need one of the following.

  • Time machine, to go forward in time, bring advanced computers invented back with you.

  • Gather all the supercomputers of our modern world ($$$), put them to work hacking an address with a Bitcoin, and still wait a very long time.

  • Buy the most powerful Bitcoin miner available on the market at the time of writing, and wait roughly a year.

  • You can buy a whole bitcoin right now, but it's not really making one. Bitcoins are purchasable at a given exchange rate through a company like coinbase.

Bitcoin's foundation is encryption, the same concept protecting our online lives today. By using encryption, Bitcoin created a network in which we can safely and securely transfer value to one another online without any middleman. This gives utility via transferability and is vital to the next question one might ask. 

What makes it valuable? Bitcoin has utility, transferability, and scarcity. Scarcity is created by the fact that we can't actually create more of the same Bitcoins, and this is due to underlying network protocols and how Bitcoin works internally. The Bitcoin wiki goes into more detail on that. While one might think this scarcity is a bad thing, it's actually alright because bitcoin is divisible to more than six decimal places, the wiki explains all the specifics.

Bitcoin is also a tool used for payments where the transaction may not be legal, giving utility for illegal activity. Without this important fact, there might not be any utility other than an accounting ledger. The more governments continue to fight against it, the more powerful bitcoin becomes to societies and humanity as a whole.

So we have three of the four elements of value, the remaining question is demand. ATOW people do buy and use it now. Will people buy more of it knowing the reason for its value? Tweet your opinion to @sbo_llc.