Sunday, February 16, 2014

Understand Bitcoin in 30 Minutes

As more people hear about Bitcoin in the media, more people ask themselves, "What the heck is a Bitcoin?"

I think it could be one of the most important and disruptive inventions of my (and your) lifetime.

If I'm right (or maybe only partly right), maybe you should invest some time into learning about it now. How about 30 minutes? That's not too long, right? We'll start slow. Ready?

Let's start with this post from successcouncil copied and reposted by sumBTC in the Bitcoin subreddit:
I say... the Internet makes everything better right? Email is better than sending letters, Google is better than card catalogs at a library. But we didn’t have real Internet money until recently. It turns out there was a really good reason: How do I know you didn't copy your Internet money and send it to someone else before you sent it to me? Meaning, you used the same money twice. Well this long standing problem only got solved a few years back by some unknown genius and now we have real Internet money. Soon the whole world will be using it, just like Email and Google.
So... Internet money. Cool. But it's more than that... if you're a visual / audio learner, hit up this 4 minute intro video:

Here's another great read which will eat up 6 minutes: Explain Bitcoin Like I’m Five.

At this point, you have the basics. And we're only 10 minutes in!

OK, now we're moving past the kid's stuff. Time to put on your big boy pants. This is the original and best description of the entire system. The original Bitcoin Paper by Satoshi Nakamoto (whoever that is). Go ahead and give it a read. It will take about 20 minutes. If you're more of an audible learner, you can listen to Stefan Monyluex read it to you here.

I started learning about Bitcoin over a year ago and unfortunately did not read the Bitcoin Paper early on. I opened it up, saw academic looking diagrams, scary math symbols and such and quickly closed it. Please, try to give it a read. It's only 8 pages. If you can get through it, you'll understand more about Bitcoin than many of the reporters I've seen commenting on it over the last year.

30 minutes isn't too much of an investment for understanding this incredible system. The next time someone mentions Bitcoin, tell them you've read the original paper. They will be impressed.

If this post saved you some time, feel free to send a portion of that saved time to me as bitcoin. You can use your normal average hourly rate :) 1KkCSkdjsjQyxfTbrZrrnsY31XZziWzhzN

Did that do it for you? Do you get it now? Please leave a comment and let me know. Also, please share your favorite resources explaining Bitcoin.

Some other posts I've done you may enjoy:


blockrocker said...

Good resources for learning the basics of bitcoin! Thanks for posting this!

PhilipBonifonte said...

Great post, Luke, and I'm sorry to have to say this but that Satoshi paper is still too much for the Average Joe. In fact, the entire field of cryptocurrency is daunting to the non-technically inclined.

I think one of the biggest challenges facing Bitcoin is to have reliable interfaces where the "common man" can utilize the system without incurring a massive headache. Right now with all the forms of wallets, the need to participate in two-stage verification through a thrid-party such as Google Auth, QR codes, blockchains ... it's an alien world for all but the nerds.

I also believe that some associations might be better dropped. Being a nerd-based world, crypto has many ties to less-than-serious causes: Second Life and innumerable other games, the late, great Silk Road - these may be part of the purpose of crypto but they don't serve very well as advertising vehicles to reach the masses.

So yes, I'm new to all this, trying to learn it, taking part in the revolution. That doesn't mean I can't see the drawbacks as well. ;)

Luke Stokes said...

Hello Philip. Thanks for your feedback!

I agree, cryptocurrency and the Bitcoin paper are technical, but so was the early Internet, email and web browsers. Over time, people adjusted, the tools got easier and everyone moved forward.

Think of Bitcoin in 2014 as personal computers in 1975 or the Internet in 1993 (hat tip to Marc Andreessen for that thinking). It's still very early on and everything you say is true, it will just take time. People were scared of the "dark" side of the early Internet as well.

Luke Stokes said...

Thank you! I'm glad it was useful to you.

PhilipBonifonte said...

Thanks, Luke - that's a very apt and illuminating comparison.

reymark perry said...

Some people find bitcoin a bit complicated. But in reality, it is actually as easy as ABC. It’s just like real money but runs in a peer-to-peer method, but unlike real dollars, this one is advantageous as it allows you to process transaction in no time; no need for middlemen.