What is Bitcoin?
It’s digital money for the internet and has also been called crypto currency.
You can spend it, transfer it or store it like digital gold. A lot of people are using as a store of value in places such as Venezuela where their currency is unstable, others are using it for payments all around the world for goods and services.
You can understand the properties of Bitcoin by remembering the 4 D’s.
- Digital – the first scarce digital asset
- Decentralised – it’s not governed by a central government or bank
- Deflationary – only 21 million will exist (as Satoshi Nakamoto wrote about in his 2009 paper “Bitcoin – a peer to peer electronic cash system”)
- Divisible – You can pay in fractions of a bitcoin (1 bitcoin = 100 million satoshis)
So how do you use Bitcoin?
Using Bitcoin for payments can seem a little confusing at the moment – it’s not as simple as using ATMs and your usual banking infrastructure. This will get easier over time, but take a look at the graphic below to learn more in a way that even your Grandparents would understand.