Bitcoin for Normal People: Part 1 – The Basics

Bitcoin for Normal People: Part 1 – The Basics


Hi, I want to show you how using bitcoin as a normal person works This series will come to you in 3 parts: This is part one in which I show you what bitcoin is

In part 2, I’ll talk about using bitcoin and in part 3, I’ll show you how to recover from a failure of your computer Many of you have probably heard of bitcoin, that it’s that money system without banks on the internet with people mining them and you have actually no idea how that works But you probably have no idea how the currency you’re using pretty much every day works either Probably a fiat currency like the euro or the dollar • Well, you know that there’s a central bank somewhere and it gives out money

• You know that some entity is printing bank notes But that’s pretty much like knowing that there are miners • You have no idea how a bank note is made • You have no idea how money is transferred between banks • Or between a central bank and the banks you’re using

• And you don’t have to to use euros or dollars Not knowing that isn’t a problem for you In fact, those things for the most part aren’t even publicly know, so barely anyone knows them Yet there are billions of people who use fiat currencies daily So let’s take the same approach for bitcoin

I’m going to teach you what you need to know about bitcoin and how to use it and you’ll see that it’s really simple In fact, it’s simpler than making a bank remittance So there are miners Miners make sure that everyone can only spend the money they have If you’re technically oriented, you can learn about how this works in detail

It’s great to know this and a lot of fun to learn it And other than about fiat currencies, you can actually learn it because all of the knowledge how it works is public But if you’re not technically oriented, you’ll probably have a hard time understanding any of the technical details And you don’t need to bother about this, just like you don’t need to bother about how a bank note is printed Just be told that there isn’t a central entity

Miners are people from all around the world with no contracts with each others If there was any way they could steal money from other bitcoin users, people would do it It’s not like with fiat currencies that there are states which make it illegal to counterfeit money but technically it’s possible to do so No nation protects bitcoin Bitcoin has to make sure it’s impossible create new money using math

And math is a whole lot more powerful than the rules of any nation Rules can be changed to create more fiat money In fact, central banks cause inflation all the time to steer economies For them, it’s not illegal to create new money And it’s not mathematically impossible

They can just print it, or in modern days, they don’t even have to print it They can just declare that it’s there and then it’s there Something like this isn’t possible with bitcoin You can easily infer this from the facts that there is no central authority — which means that everyone has the same right to decide stuff — and that the bitcoin price isn’t at 0 where it would be if people could just decide that they now own a lot of bitcoin from nothing Then you need to know that in bitcoin, money is sent to addresses

Addresses look like this You can own as many of them as you want and they don’t cost you anything If you have money in an address, you can spend it That is, to send it to a different address Much like you can send money from your bank account to a different bank account in order to spend it

To send money, you need a wallet A wallet looks something like this and I’ll explain to you how to get one and how to use it in the second part of this series

About the Author Dancake

Hey hey hey. It’s Ville and welcome to my blog. I am a tech enthusiast and always looking for ways to generate new income streams. At the moment Bitcoin cloud mining is one of the most promising ones and that’s why I created this website. Hope you like your stay. If you want a quick start guide about making passive income with cloud mining check out this guide.