Explaining Bitcoin is a very challenging for several reasons. The engineers of bitcoin have used confusing language which makes people compare bitcoin to the existing monetary system.
Bitcoin is not a coin. It does not exist in physical form. Bitcoin is an encryption code.
A bitcoin wallet is not a physical wallet. It is a storage for private encryption keys.
The terminology in bitcoin is confusing because the parallels to physical cash are misleading.
To make matters worse, most people do not understand the concept of money. We do know what money is and how it is created.
Money is a language that we use to communicate value. Bitcoin is the new language of money.
There are problems with the current monetary system and bitcoin is here to solve those problems. Bitcoin is a solution to fiat currency as much as fiat currency was a solution to the use of precious metals. It took over 400 years for humanity to accept paper money. It is taking time for humanity to accept bitcoin.
Bitcoin is a decentralised public asset and transaction ledger with private access using cryptography. Bitcoin helps us to keep records of asset ownership and financial transactions which cannot be manipulated or monetized by an untrustworthy and greedy third party like the banking system.
Bitcoin is a peer to peer public ledger. It allows individuals to transact any amount with any node on the bitcoin network in a faster and cheaper way. It doesn’t matter how much money you’re sending anywhere in the world, the charges are very small.
Bitcoin is money as a content type, which means you can send it via text or email. Anyone with a cheap mobile device which accepts text messaging can send and receive bitcoin.
Bitcoin is a solution to the challenges that we face with fiat currencies. We have become used to these problems and we think it is normal to have them. If you’re in the diaspora and you urgently need to send large sums of money, you may have problems if it’s after hours or at the weekend because the banks are closed. Although it is your money, how you use it is controlled by a third party who charges you for deciding how and when to use your own money.
Fiat currency and the current banking system is responsible for the financial exclusion of the unbanked and underbanked. These people are unable to contribute to the global economy because banks will not give them access to financial instruments such as loans and mortgages.
Bitcoin brings everyone into the global financial system. All you need to become your own bank is a cheap mobile phone with text messaging capabilities.
All images are courtesy of Pixabay.