Bitcoin is... in simple words

In simple terms, "digital money. Physically, this currency does not exist, there are only special electronic registers that keep records of how many coins someone has and who transfers them to where. These registers are called . Bitcoin is also called cryptocurrency or electronic payment system like Visa and MasterCard.

The cryptocurrency itself, which anyone can install on their computer. Bitcoin address is a set of Latin letters and numbers 34 characters long. It can also be represented as a QR code.

Sometimes in pictures we see bitcoin as a simple coin in different colors - gold, silver. It even has its own mark. However, such money does not and cannot actually exist, because it is essentially an electronic record in the system, which for convenience was called a coin. Investors know bitcoin by the code BTC, but when you buy it, you get no paper, metal or any other physical equivalent - only a record in your bitcoin wallet.

Many people call bitcoin the electronic equivalent of gold, because the cryptocurrency, like the precious metal, exists in a limited amount, set by the author. Over time, it becomes more and more difficult to mine, requiring more and more computing power. Perhaps this is the only similarity.

And frankly speaking, BTC can in no way be compared to Gold, because bitcoin's volatility is extremely high and it is a risky investment asset. Gold, on the other hand, is an instrument that conservative traders buy.

Bitcoins differ from ordinary currencies in that registries are not stored centrally in banks and payment systems, but simultaneously on all computers whose owners have installed special software. Anyone can see all the buy-sell-transfer transactions with all the bitcoins throughout history, but they will be anonymous.

In addition, cryptocurrency money cannot be paid for without software, so to speak, in cash, and in some countries the electronic version is now also banned. Bitcoin is an investment instrument that is trying to get the role of money, but so far, due to the lack of regulation, this is not happening. However, despite this, it is becoming more and more expensive to buy BTC.

At the moment there are a lot of cryptocurrencies like BTC (more than 1000), they are also called altcoins. Periodically some appear, others do not withstand the competition and disappear from the market, but bitcoin was a pioneer and earned credibility.

It is followed very stubbornly by , which is interesting to investors also because of the technology. It is possible to create ether just like any other cryptocurrency - through mining. But now mining is becoming less profitable, so altcoins and BTC are easier to buy on the exchange.

Bitcoin developers have managed to come up with a system where it is possible to avoid problems with intermediaries such as a bank or a payment system that charge a fee for their services. This is achieved by a technology where each user can directly transfer money to another user.

Bitcoin registries are protected by cryptography. It is impossible to fake them all at the same time. You can't rewrite the data in the blocks and claim that someone now has millions. BTC is pretty secure in that sense. True, there is already an attack that allows you to pay twice with the same bitcoins, so it is impossible to say that bitcoin is absolutely secure.

A simple and straightforward video on what bitcoin is.