by any government, or controlled by any bank.
Nothing can be hidden/manipulated due to how transactions are verified on a sort of global
spreadsheet called the "Blockchain" (trying to keep things super simple but if you want to
read the ins-and outs you can find the full "bitcoin white paper" which goes into depth in
how transactions are confirmed and "minded") in which 1000s of computers verify each
purchase transaction and bitcoin send on the network.
This means that essentially this spreadsheet is duplicated and synced live all around the
world by 1000s of people - similar to a peer-to-peer system which has no focused
centralization to control (or manipulate) it.
You can send bitcoin from your computer, tablet, smart phone or other device, to anyone,
anywhere in the world, day or night.
The transaction fees are either 0% or a tiny fraction compared to the cost of a credit card
payment or a bank transfer (especially internationally). And the time taken is dramatically
reduced - on average, a transaction completes in 20-30 minutes (once it has been
verified).
How is bitcoin "printed?"
It isn't.
No one prints bitcoin in the same way that regular national currency is printed.
Whereas a bank can simply produce more money to cover the national debt, thus
devaluing their currency and causing inflation..
Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins
are "mined" using computing power in a distributed network. This "mining" is the method of
processing and securing each transaction - locking them into the "blockchain" ledger.
Miners earn bitcoin as rewards for using their computing power when they verify
transactions and solve the complex mathematical formulas associated - this now requires
quite significant (and growing!) computing power.
There's a limit to how many bitcoin will be created
The Bitcoin protocol - the code and mathematical rules that bitcoin is based on state that
there will only ever be 21 million bitcoins created by miners.
This finite number means that bitcoin is deflationary rather than inflationary like all other
national currencies; i.e. because the bank is constantly printing more money to cover debt
and to fill new loans, the value of the currency as a whole falls - thus we have inflation.
However with bitcoin, only 21 million can ever be created, so the currency is deflationary -
as it becomes used more and more in demand, the price will rise as there is a fixed,
definite, limited supply.
Now 21 million might not sound like enough if it is really to be adopted and used as a
worldwide currency and accepted in all online shopping.
But it is :)
Breaking down a bitcoin (bits and satoshis)
This is where things start to get really interesting :)
Understanding the make-up of a bitcoin will help you to see just how valuable the
thousands of bits that you can get for free TODAY really could be in the future.
Each bitcoin can be divided down into 8 decimal places - so each bitcoin contains 100
million units, each called a 'Satoshi', (named after the mysterious founder of bitcoin
Satoshi Nakamoto) - here 1 satoshi is represented:
0.00000001
However, more recently the unit of "bits" has been adopted.
There are 1 million bits in every bitcoin - this takes the decimal placing to only 6 spaces
out of the available 8, leaving 2x 00s left over on the end, which will be used as decimals.
Here one bit is represented:
0.00000100
The measurement in bits has been created with e-commerce in mind. We are simply used
to thinking in whole numbers, so rather than thinking of the price of something being 0.06
of a bitcoin, we write this price as 60,000 bits.
Looking at bitcoin like this makes it much easier and more realistic to see how it will be
used and how it really can go mainstream right! ;)
And right now, you can still get THOUSANDS of bits for free every day!
If you did this 4 years ago...
So if you had spent a little time each day 3 years ago getting some free bitcoin using the
free bitcoin faucets I'm going to show you, if you acquired just $1 a day for a year - then
that $365 value would now be worth $182,500*
*math assumes from perspective of bitcoin being worth $1 3 years ago to being worth $600 today.
... yes... WOW!
Even if you are only getting small amount of $ value worth of bitcoin today, and it might
seem like you have missed the boat from when the price was $1 or less, to it now being
worth $600 - but this is far from the truth.
Please keep in mind that there is HUGE investment going into bitcoin right now (so far in
2014 there has been over $250million invested by venture capitalists into bitcoin start-ups
- this is approximately the same amount as went into Internet business start-ups in the whole of
1994, the start of the Internet boom).Right now you can invest in bitcoin (or get free bitcoin)
BEFORE it really goes mainstream
before Wall St gets the regulation it needs to be able to trade it and offer it in ETFs and
funds for investors (rumoured to be coming at the end of 2014 / early 2015), before it gets
implemented into mainstream banking, and before it gets really mass adopted as a
payment currency online and offline (this is already well under-way and new merchants
are accepting bitcoin every day - including Expedia, New Egg, Overstock and Tiger
Direct).
The THOUSANDS of "bits" you are getting for free right now will have real value in the
future - the thought of needing to acquire a whole bitcoin will be laughable, it is the
decimals, the bits which will be used.
It is right now which is the critical time to invest in, or get involved in bitcoin - or get a LOT of bits for free,
while you still can!
Especially because you can do so for 30 minutes in your lunch hour instead of playing flash games, or
even on your smart-phone as you sit on the toilet!
Imagine 10 years from now when bitcoin really is adopted and used in the mainstream, being able to say to people you made 100,000 bits while sitting on the
toilet back in 2014 :)