How Bitcoin Works

Kelamthing - If you have invested just $100 in Bitcoin in 2011 you could have made almost 2 million dollars today you could have become a millionaire just with $100  maybe a billionaire if you have invested a couple of thousands of dollars and there are people who actually made a fortune out of it bitcoin is the hottest topic today because it surprised absolutely skyrocketing it went from a single dollar in 2011 to over $18,000 in recent days and a lot of people are wondering in days to should invest in Bitcoin is it too late or there is still a fortune to be made and that's the question we'll try to answer in this video but before that we have to understand what bitcoin is in the first place and how exactly it works for much of history we have used gold silver and some other metals as form of currency but the most famous one of them was gold in fact it was used until 1971 and that's pretty much the reason why we have Bitcoin 

Today look we have been using paper money for centuries but it was different then because it was backed by gold that means that every dollar used to represent an amount of gold in the bank so instead of carrying a pack of gold with you every time you could have simply carried papers and get your gold anytime you want in other words you can't simply print money like government's do today unless you have gold to back it with and that's where the problem started right after the Second World War the United States dollar became the International currency of the world because United States had more than 70% of the gold so they could print more money than anyone else but unfortunately United States printed more money than the amount of gold they had so when other countries requested United States to exchange their dollars for gold United States replied oops sorry we no longer exchange dollars for gold because we don't really have that gold and that's what happened in 1971 and since then our money is simply a piece of paper that doesn't really have real value and the people in power can simply print as much money as they won and that's why prices increase every year but it didn't stop there it crashed the whole economy in 2008 and guess what did the government's do to save the economy yes exactly they printed even more money 

United States alone printed almost four trillion dollars and that's the basic problem with the paper money that we use right now it's centralized controlled by a small group of people and can be easily created out of thin air so a guy named Satoshi Nakamoto came out with a new currency that's decentralized because it's controlled by everyone who is in the network not even the government and it cannot be created out of thin air in fact limited amount of them exist like gold and named it Bitcoin so let's find out how exactly it works Bitcoin works on a technology that's called blockchain it's pretty complicated to understand but here is a simplified version everything on internet is a copy of the original this video is a copy of the original video that's on my computer and I can create as many copies as I want and the same applies to everything else that's on the internet articles pictures you name it so it's impossible to create a digital currency because you can simply just copy it and that's what blockchain is for everyone in the network can see how exactly every single coin moves from one person to another and that you can see the entire history of each coin wants to join the network so if anyone tries to corrupt the system the entire network will find that out immediately and rejected therefore it's almost impossible to cheat all the new transactions are collected into a new block and a new block is created every ten minutes and all these blocks are connected to each other and that's why it's called blockchain

But no matter how advanced is this technology it still can be hacked right not exactly every new block besides recording new transaction also includes all other transactions that has ever been in the history of the network and for the system to recognize a block it must match all other block that has ever been created in the network in fact it also has too much the next block that will be created in the next ten minutes and all the future blocks as well on the top of that every single block and every single transaction has an advanced cryptography and if a new blog will be added that doesn't match all other blogs that has been created previously and will be created in the future the cryptography in every single of them changes which makes it easier to recognize the corrupted block and this makes it almost impossible to hack not because no one knows how to do it but rather the computer power that's needed to do that should be bigger than the entire network which consists of millions of computers and the bigger the system grows the more secure 

It gets so if you want to send money you don't have to go to the bank or any third party but rather you can do it at your fingertips and for free especially when it comes to sending money to another country you don't have to wait four days for the bank to do it but rather wait for 10 minutes once a new block is created but the main question is should you invest in Bitcoin the answer is yes and no yes because obviously it seems like that's the future of our money but Bitcoin isn't the only cryptocurrency out there there are also aetherium litecoin and others but bitcoin is the one that's growing the fastest and that's the problem just as january of this year it has grown from less than $1000 to almost $20,000 and anything that's growing too fast will eventually collapse and come back to its real value but we don't know how far it will go it might go to 20,000 25,000 or $100,000 before it collapses so you have to make your own research and if you want to invest remember that's a big risk that you're going to take and now it's your turn what do you think is Bitcoin is going to be the future currency of the world or it's just a hat that's going to disappear after a while I would love to know your opinion and as always if you have