Bitcoin is an independent digital currency (just as digital as the money numbers in your bank account). The difference is that YOU have the control over this number, not the banks. Bitcoin is NOT controlled by any government or any bank. It works on the same idea as BitTorrent, but instead of broadcasting files, transactions are broadcast to thousands of servers that check on each other to make sure the transactions are valid by means of advanced cryptographic algorithms. You also can run a Bitcoin node/server at your home.



Bitcoin has become the fastest appreciating asset in human history. In November 2013 for a brief time, each Bitcoin was worth over a $1000 dollars, in contrast to 2010, when the first Bitcoin transaction recorded was for two Pizzas at a price of 10,000 Bitcoins. Bitcoin's value has been extremely volatile since it's inception.

5% price fluctuations are very common, sometimes multiple times a day.



Bitcoins can be bought or created. Creating Bitcoins requires a computer to calculate and solve for a key, that releases the Bitcoins. At first it was easy and anyone could create Bitcoins on a regular home computer, but the Bitcoin ecosystem automatically adjusts so only 12.5 Bitcoins (12.5 for now) are released every 10 minutes systemwide, no matter how many computers are solving for the key. Today to make any serious money on mining Bitcoins, it requires specially designed one-purpose computers/servers in huge arrays, like shown in visualization above. Why Bitcoin? Bitcoin can not be created out of thin air, unlike Dollars and Euros. Bitcoin follows the laws of thermodynamics- Bitcoin requires input (computer tech investment and electricity) to create/mine Bitcoins, just like Gold requires equipment and fuel for mining/extraction. Bitcoin is finite, with only 21 million coins that will ever be created. Bitcoin is deflationary versus Dollars and Euros that are inflationary. You have total control of your funds,you can transfer it globally near instantaneous speed with immutability- something neither Dollar, Gold or any other storage of wealth can offer. Long term outlook for Bitcoin is that it might do to Money what the Internet did to Communication. Potential Risks: Bitcoin was created by the mysterious figure Satoshi Nakamoto (pseudonym), the identity of the creator is still argued to this day.

First there were fears Bitcoin's code can be cracked and the system can be destroyed, but 8 years later, such fears have subsided and price has rocketed. Now other roadblocks face Bitcoin, such as scalability- Bitcoin has a theoretical limit of 10 transactions/second, while Visa/Mastercard does ~2000/second. Scalability has turned into a heavy long debate because NO single person can "upgrade" Bitcoin, there must be a system-wide consensus. While in the past getting consensus has worked well, with this specific scalability issue the global Bitcoin community has failed to agree for some time now. There are now many Cryptocurrencies like Bitcoin, still Bitcoin is most dominant. Bitcoin created an idea, but competing crypto currencies with better implementations could possibly overtake Bitcoin in the future, just like Facebook overtook MySpace.



