Have you imagined learning the basics to start and understand Bitcoin and more generally the cryptocurrency in a few minutes? Bitcoin is a cryptocurrency, and you are in the right place to understand everything.
This guide has a “Bitcoin for Dummies” approach and even better! Because since Cryptocurrency is a digital technology with algorithms, cryptography, [insert your complicated word] then I have simplified to the maximum so that you can understand bitcoin easily.
Easy bitcoin for dummies
As a result, this guide explains what is bitcoin (or a Cryptocurrency). However, some points are simplified or even inaccurate for one’s purpose: to understand easily.
Do you feel ready?
Do you want to know everything about this Cryptocurrency called Bitcoin? (yes, let us know because we will spend a few minutes together)
1. What is bitcoin?
• Several definitions of Bitcoin
2. How does a Bitcoin work?
• How does bitcoin work in this cloud?
• Improved security
• Heard about blockchain, what is it?
• To sum up
• To continue
What is bitcoin?
I read many Bitcoin definitions, I said to myself “I want a simple definition of what bitcoin is”. On Wikipedia, the page is completely rigorous and totally dehumanized and on en.bitcoin.it although there are simplification efforts it is not yet that much simplified.
Several definitions of Bitcoin
B as Bitcoin
and 2 parallel lines
As a result, sometimes people will talk about virtual currency, or electronic money, or even digital currency. In practice, Bitcoin is technologically very different from the virtual money that you trade in a video game (virtual currency). And to the limit, if I believe the European Directive (or inspired by the vocabulary e-book/e-book Crypto-currencies may fall into the category of electronic money. During the first video games “electronic games” were used; in reality “games with electronic support”. Today, a tablet like the Ipad is an electronic medium. As for Bitcoin, since we need an electronic access point to access the internet: yes Bitcoin is an electronic money. And, in the same way, that the bank provides a payment terminal to pay by credit card, it could be said that Bitcoin allows the use of any electronic device – obviously connected to the internet – as a payment terminal. And, “because the digital book is specially designed for online use” (here), so it’s also fair to say that bitcoin is a digital currency.
But, let’s leave these nuances to the experts of the monetary regulation and the
It seems more accurate to say that bitcoin has allowed the emergence of a new category: cryptographic currency called today: Cryptocurrency. (We will say more rarely crypto coin)
Let’s go back to what interests us. OK?
Bitcoin is a way to transfer via the internet a (monetary) value in a really, but then, really very secure way
Do not worry! The ugly word “secure” we’ll talk about it – a little – later.
About the banks: The banks are being hacked is not it? Caricaturally, Hollywood movies – exaggerating – show hackers stealing money from a bank account to transfer it to the Cayman Islands. Cryptocurrency, it is very secure!
How does a Bitcoin work?
Before we continue, let’s talk about the Cloud.
We usually define the Cloud (or Cloud Computing) as a computer network always connected to the internet.
I send a photo to a host. He stores the photo. And I can come back for the photo
I send a big computer calculation to do (like a scientist’s calculation that requires days of treatment). The computer network calculates. I receive the result
I create a document on Google Doc, I edit it directly. It is kept on the internet. I can reopen this document from anywhere in the world and continue to write my text.
Said differently, the Cloud is when everything goes via the internet and the Cloud is always available (or switched on)
Send/receive Bitcoins is a 100% process via internet
We will say that there is a Cloud-Bitcoin. It will help you understand.
Bitcoin is a payment method in a cloud. This cloud-bitcoin is entirely dedicated to operations (send a Value “money”, receive a value “money”, and other things a little technical: / … we will quickly pass on that, isn’t it?)
- * via internet (human => cloud => human)
- * on the internet (it’s always available)
Not like your bank that remains closed on the weekend
How does bitcoin work in this cloud?
Let’s use a few simple words, and especially an analogy. You don’t mind?
Take the example of an accountant. Yes, it’s a job …exciting;
Here’s how it works in the cloud, this Bitcoin network is always available (even holidays) on the internet.
1. The accountant receives money.
2. He marks it in his big newspaper: the account book
3. It also marks how much is available on the account itself
4. The accountant sends money
5. He marks it in his big newspaper.
NB: when I talk about money coming in / out, I’m insinuating “between 2 bitcoin accounts”. If you want to buy Bitcoins with your euros, it will be more like a currency conversion.
So far it’s very good. But our accountant, if he is alone in his poorly-lit office, could tamper with the accounts. How can we trust him?
This is one of the great ideas of Cryptocurrency!
1. The accountant must display publicly every 10 minutes
1. cash inflow
2. money outings
But, if the accountant is a malicious genius then we will still add a security method.
Using these accounts (this entry/exit list of money) now public, we will have the work of our accountant checked. To schematize, let’s say that the bitcoin network consists of 51 accountants. Independent workers united in their love of the trade!
1. The accounting journal is verified by 50 other accountants
2. And the newspapers of the other 50 accountants themselves are checked by the other accountants
In other words, the computer network dedicated to this Cryptocurrency is self-evident. It’s awesome!
Bitcoin is a way to send money 100% on the internet. There is actually an exchange of accounting information
The security of this exchange is possible thanks to a computer network (cloud-bitcoin) which is self-checking each-other.
In other words, bitcoin manages to self-check itself and that on a technical IT is a level that deserves a Nobel Prize. Yes without messing around!
I heard about blockchain, what is it?
What I call Cloud-Bitcoin is the block-chain. For reasons of simplification, which word speaks to you the most? The chain of blocks is a bit technical. The blockchain definition given by the site blockchainfrance.net is sufficient.
The blockchain is a technology of storage and transmission of information, transparent, secure, and functioning without a central control body (Definition of Block-chain France).
It’s easy to explain, as long as you do not use the technical terms. So, if you want to, let’s look at what our accountants are doing.
All accountants checked the newspaper of others
They marked this exit/cash entry (so that ultimately all the accountants would have the same diary the same as the comma) And since it takes a little organization,
When the newspaper is full, the accountants consult each other (imagine the long boring discussion)
At a great esoteric ceremony, they burn newspapers and it turns into a single magical newspaper. (Yes, I simplify to not go into cryptographic terms)
This magical journal is the witness of past accounting operations.
It is no longer possible to use this log. It’s frozen in the marble, do you understand where I’m going? Yes?
And better, the newspaper becomes permanently bound (magically of course;)) to other newspapers that have suffered the same fate
This ceremony takes place every full moon night (I’m kidding there) and allows to archive the chain of accounting events (yes, you understood) says otherwise
1. we stick its pages (to no longer be able to modify it) … but the magic allows anyway to read it for historical reasons
2. we give him a number in the order.
3. we add a precision. E.g. “The newspaper n ° 100 is the continuation of the newspaper n ° 99”. It’s logical
4. we put this newspaper on a shelf in a well-organized way.
The logs are block, and they constitute a chain: newspaper n ° 1, newspaper n ° 2, newspaper 3, etc
This is the blockchain
Every time a log is full (every 10 minutes … because there are a lot of transactions), this one is added to the chain. And the network says: the transaction is definitely validated. That is to say: the money has been sent.
note Well: All the magical part makes calls to notions of cryptology.
Simplified operation of the blockchain
- Bitcoin, through the blockchain, is a system of exchange of book values (additions and subtractions)
- Available via internet 24 hours
- A transaction is very reliable because the network is self-checking (it’s great practice)
- There is confidence because any computer or human can read the accounting journals.
Here is an example to read in the string block. Warning: the site will read in the blockchain and then reinterpret the result in a friendly way (whatever … it looks like a diary with complicated figures is not it?) With images, graphics, etc.
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