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🥇 BITCOIN 101 THREAD 🥇 This year El Salvador made #Bitcoin legal tender 🇸🇻 Tesla and Microstrategy have bought billions of dollars worth of bitcoins 💸 But what actually is Bitcoin? Here's a guide to everything you NEED to know about Bitcoin ($BTC) THREAD BELOW 👇On twitter.com
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Bitcoin fast facts 🏃♂️💨 • Bitcoin is a digital cryptocurrency created in 2009 • It allows individuals & companies to send money directly to each other without relying on third parties • It is decentralised (like email) - no one person, company or government controls itPermalink On twitter.com
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• Bitcoin has a fixed supply of 21 million coins • Each coin can be split into smaller amounts, like a pizza 🍕 • The smallest unit of Bitcoin is called a 'satoshi' (or sat for short) • Bitcoins are stored in software applications called 'wallets'Permalink On twitter.com
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• It's secured using public-key cryptography (a fancy way of saying using encryption) 🔑 • Bitcoins are sent peer to peer using a network of computers spread out across the world 🖥️ • Payments are sent quickly - for comparison, an ACH transfer takes a few business days 🐌Permalink On twitter.com
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So, who created Bitcoin? • In 2008, a white paper was shared on a cryptography blog by a user called Satoshi Nakamoto 🕵️♂️ • Nakamoto created the first version of Bitcoin, but in late 2010 Nakamoto vanished • To this date, no one knows the true identity of Satoshi NakamotoPermalink On twitter.com
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• Other developers have since continued working on Bitcoin but they don't 'own' the Bitcoin network - No one does • The software is actually open-source! Anyone can view it to understand how Bitcoin works and submit code changes to improve it👇 github.com/bitcoin/bitcoinPermalink On twitter.com
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How does it work? • Bitcoin is created, traded & stored on a ledger called the blockchain, a publicly distributed record of all transactions made using Bitcoin • This ledger is made up of interlinking blocks that contain a number of transactions & a link to the previous blockPermalink On twitter.com
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• Computers in the network all have a copy of the ledger. It's not stored in one central location, making it harder to attack the network • To add new blocks to the blockchain & create new bitcoins these computers run specialised software to 'mine' blocks and mint new bitcoinsPermalink On twitter.com
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• Mining is the process of using computers to solve complex computational math problems • This network of miners help validate new blocks & add them to the blockchain • In exchange, they get rewarded with some bitcoin 🤑Permalink On twitter.com
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• Mining isn't easy however, it requires expensive hardware and a lot of electricity 💸⚡ • As more miners join the network, the difficulty of mining a block also increases • This ensures there's a steady & predictable supply of new bitcoins being mined 📈Permalink On twitter.com
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• Roughly every 4 years, the number of Bitcoin mined from a block gets reduced by 50% - This is called a halving event • Today miners receive 6.25 bitcoins from a block & almost 19 million bitcoins have already been mined • The last bitcoin is said to be mined around 2140Permalink On twitter.com
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What makes Bitcoin valuable? 🤔 There are 5 key factors that make Bitcoin valuable (See below) 👇Permalink On twitter.com
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1️⃣ Scarcity - it has a limited supply 2️⃣ Durability - it can be used multiple times 3️⃣ Portability - it is easy to move around 4️⃣ It's divisible - can be used for smaller transactions easily 5️⃣ Fungibility - each bitcoin is exactly the same as another bitcoinPermalink On twitter.com
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These factors make Bitcoin desirable to people & companies Since there can't be more than 21 million bitcoins, the value of a bitcoin shouldn't decrease (in theory) unlike the US dollar and other fiat currencies which are subject to inflation as more is printed 🖨️Permalink On twitter.com
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This has lead to people calling Bitcoin digital gold, a 'store of value' and a hedge against inflation and over the last decade, its value has overall increased 📈 There are however some risks when it comes to Bitcoin 👇Permalink On twitter.com
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Volatility 💥 Historically Bitcoin's price has fluctuated a lot It's possible that you could lose a lot of money if you decide to buy some bitcoins and then the price drops and you decide to sell your bitcoinsPermalink On twitter.com
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Regulation 🚫 Bitcoin itself is unregulated and there's no guarantee that the value of Bitcoin will increase Some countries have even banned the buying and selling of Bitcoin and other cryptocurrencies recently 🇨🇳Permalink On twitter.com
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Security 🔒 There are countless stories of people who have lost access to their bitcoins or have had them stolen by criminals It's usually impossible to recover bitcoins that have been lost/stolen I highly recommend going over this thread 🧵👇 @bobbyong/1403881080902471680Permalink On twitter.com
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And finally, scams 🦹♂️ There are a ridiculous number of scammers trying to scam people out of their bitcoins Be wary of anyone offering free bitcoins, pretending to be support for crypto companies & potential hacks (like the one Twitter suffered in 2020) theverge.com/2020/7/15/21326200/elon-musk-bill-gates-twitter-hack-bitcoin-scam-compromisedPermalink On twitter.com
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Recap 🧢 • Bitcoin is a decentralised network used to send money P2P • Bitcoins are mined by computers & every transaction is recorded in a blockchain • There are 5 main factors that make Bitcoin valuable • Be aware of the risks that come with BitcoinPermalink On twitter.com
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Like this thread? 1. Retweet the 1st tweet above ♻️ 2. Follow me @akashgoswami_ for more threads I'll be dropping soon 🧵Permalink On twitter.com
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You can read the unrolled version of this thread here: typefully.app/u/akashgoswami_/t/7ZOO8rZC2BC6Permalink On twitter.com
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