Bitcoin, a short story

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  1. ¿What IS Bitcoin?
  2. ¿What can I use Bitcoin for?

A quick summary of what Bitcoin is about, real simple. Perfect for newcomers and a general idea of this new technology.

For practical purposes this will be really short, and I will focus on explaining two main things about Bitcoin. What it represents for the world and which are its main pillars of creation, and its real life usability.

¿What IS Bitcoin?

Bitcoin is a decentralized currency that can be transferred P2P (Peer to peer, or people to people). Decentralized means that there is no public or private administration that controls Bitcoin. No one can take your bitcoins, manage them, or sell them without your control (providing you are holding/buying bitcoins in the correct means for that). It was created with the purpose of being a currency that no central bank can control, giving freedom of choice and security to its holders. It is a system of payment that can be used freely from person to person.

And then, where does Bitcoin exist? Is there any network in which it is sent from person to person? There is, of course, and that is the Blockchain.
A Blockchain is a network in which people create “nodes” through which they maintain that network secure. If a server is down in India, there can be another one in China running, if both servers in India and China do fall, there is always another one in the USA, if that falls as well, maybe a server in Denmark can be running, even you can have a validating node working and running, and that is what it makes it decentralized as well, since there is no administration running all the nodes, it depends on its people and the trust between those nodes which is kept by running mathematical calculus between those nodes creating a “consensus mechanism”.
To maintain that mechanism you require a big amount of energy and to solve those calculus. That is where the “Bitcoin mining” comes into place. The miners who put time, energy, and solve those calculus to keep the network running and to keep it decentralized with its consensus mechanism, are rewarded with Bitcoins in return.

That would be the big picture of the whole ecosystem, it will be your task to investigate even further. This is only a short (hopefully) explanation of the whole ecosystem. But then… What can I do with it? If I know how a blockchain works and how Bitcoin works, is it really THAT easy to send payments? Why do I care that it is a decentralized network?

¿What can I use Bitcoin for?

This is my self appreciation on what you can use Bitcoin (and most likely Blockchains) for.

First of all, Bitcoin nowadays is a store of value. Its network is incredibly slow, it comes at a high cost (making transfers in exchanges and to people a little bit hard with so many zeroes, unless you have a lot of money of course), and you can not take full advantage of many other benefits that other protocols offer. Sorry to disappoint, but Bitcoin is not that exciting on its own, other than storing it in a personal non custodial wallet.

I would recommend that to really understand the full extent of every blockchain you investigate even further on other promising blockchains such as Near Blockchain, Polkadot, Solana, and if you have some money to spend… Ethereum as well. There are a lot of different blockchains that offer more than just sending your cryptocurrencies to another person. And why do I bring all of these names that you may have never even heard before? Because cryptocurrencies ARE NOT just Bitcoin. Bitcoin is one of many, and the first one. But there are a lot of other protocols (Blockchains) that offer all kinds of financial tools, such as lending, borrowing, staking, interests, trading, and even other very useful new tools that are not that much for financial usage but more for other day to day usage as digital signatures (with high security) and patent registration.

There is a whole new world to discover, and I hope I can be a suitable guide!