Bitcoin and other “cryptocurrencies” have earned quite a bit of attention over the past few years. Many call them “the future of money,” but a majority of people don’t really know much about them.
What are cryptocurrencies? How do they work? How do you get them? Where can you use them? And what makes them safer, faster, and often cheaper to use than cash or credit? Your host for this video—5th Quill Studios co-founder Randy Clemens—answers these questions and more, walking you through an in-depth overview of this paradigm shift in money. You’ll see how Bitcoin is already benefitting millions of users across the globe, and you’ll learn how you can be one of them.
Join us as we decrypt Bitcoin, from its enigmatic beginnings in late 2008 to a look at its promising future. We’ll also explore the breakthrough technology underneath Bitcoin—”the blockchain”—and how it can change more than just our relationship with money; it can transform our societies, our governments, our businesses, and possibly our every interaction…
Bitcoin is more than just a convenient way to send money to anyone, anywhere; it also reduces the costs and friction of international commerce, and presents a viable alternative to the world’s troubled currency markets. The idea for Bitcoin and its underlying blockchain technology were published in October 2008 by an anonymous user—or group of users—under the pseudonym Satoshi Nakomoto.
By 2010, Bitcoin grew to be the world’s top performing currency, a feat it would repeat in 2011, 2012, 2013, and 2015. Today, there’s more than 10 billion US dollars’ worth of Bitcoin in circulation, with millions of Bitcoin transactions occurring each day.
Digital, electronic money transfers have been around for decades, but what sets Bitcoin apart is that it is completely decentralized; no single person or institution controls the Bitcoin network. And its structure, money supply, and the transaction record can’t be manipulated by any bank, government, organization, or rogue bad actor.
The Bitcoin network is made up of thousands of independent computers—called nodes—located across the world. Rather than having one central party control a private ledger, each node on the Bitcoin network maintains its own copy of the blockchain, a distributed public ledger which some have called “the biggest thing since the internet.”
At its essence, the blockchain keeps track of every Bitcoin transaction that’s ever taken place, and enables what is called distributed consensus—each node on the network can mathematically verify that the ledger is accurate and has not been altered. And each node can see that the copy of the blockchain they are using matches the blockchain data that other independent nodes are using. There is no central party controlling the ledger; it only gets updated by the consensus of nodes around the world. This is why Economist Magazine dubbed the blockchain “the trust machine.”
We created this video to explain the benefits of using Bitcoin, as well as to provide an informative overview of how Bitcoin works under the hood. There’s a lot more in-depth explanation in the video, but here are just a few of the reasons why more people are using Bitcoin everyday:
Bitcoin’s low- to no-fee transactions are already disrupting several markets. Some of the largest relief will be for remittance payments, money sent home by people working in other countries. This is a HUGE economy, with an estimated 580 billion dollars flowing to families in developing countries. Banks and companies like Western Union take an average of 9% of that, though it can reach as high as a whopping 16% for something Bitcoin does essentially for free.
YOU control YOUR money! Transactions are handled with a buyer and seller only… no middlemen taking a cut of the sale. There is no third party holding your funds, no monthly account charges, no overdrafts, no “convenience” fees for spending or transferring funds.
Bitcoin mixes the digital ease of credit card payments with the privacy of a cash sale. With credit cards, you hand over your sensitive private data and account number every single time you buy something. Credit card and bank data centers are constantly warding off cyber attackers, at great cost, though they’ve been less than successful. With a decentralized network like Bitcoin, there is no single point to attack. No stored private data to steal. You don’t have to trust any third party to store your funds or information. Again, YOU are your own bank!
Tools like Bitcoin debit cards now let people spend their cryptocoins anywhere credit cards are accepted, and several third-party tools such as Gyft.com and Purse.io have popped up that help Bitcoin users actually SAVE MONEY on their Amazon orders and on gift cards for everyday purchases from places like Starbucks and Target.
The estimated 4,000,000,000 people on earth who currently don’t have reliable access to banks can now plug in to the global financial network… with nothing more than a cell phone that can send a text message!
Bitcoin has also attracted plenty of users because the price can still be quite volatile, enticing speculators to buy low and sell high. Online exchange markets allow users to invest in and trade cryptocurrencies just like a stock market, only this runs 24/7 and there’s no need to go through a costly broker. As with any investment, it’s best to do some additional homework before considering jumping in. Don’t invest any money you can’t afford to lose.
Bitcoin and blockchain technology allow for micropayments: small amounts like a few pennies or fractions of a cent. This is of particular interest to the financial industry, and as the advertising industry continues to slowly die—clogging your browser windows with more clutter and spyware to support “free” content—micropayments could allow people to access the content they want without being subjected to invasive ads or needing to sign up for a full unlimited subscription to all the site’s content.
There are numerous large online retailers—and a growing number of savvy brick-and-mortar businesses across the world—jumping on the bandwagon. Accepting traditional credit card payments is expensive for merchants; Bitcoin’s low transaction fees save business owners serious money! Credit card transactions are also vulnerable to fraudulent payment reversals and chargebacks. Bitcoin payments are not reversible, making malicious chargebacks a relic of the past. Checks and electronic/ACH transfers can take days or weeks to clear; Bitcoin payments are sent nearly instantly and confirmed within minutes.
Bitcoin is fascinating, and Bitcoin users are fascinating people! There’s a robust community of inspired people that are excited to help new users learn the ropes for using Bitcoin casually or how to accept Bitcoin for your business.
You may have heard of Bitcoin “mining,” which we make a point to explain in this video. Yes, mining is one way to get Bitcoin, though it’s not really considered cost effective to get started mining at this point without significant investment and very low electricity rates. There are plenty of easier ways to get Bitcoin, thankfully.
For many, the simplest way to get Bitcoin is to just find someone in their area who uses it. There are currently 900+ local Bitcoin groups across the globe on Meetup.com! And a website called LocalBitcoins.com connects people around the world, allowing them to trade traditional currency or other items like Amazon gift cards for Bitcoin, online or in person. Bitcoin ATM Radar also has a map of Bitcoin ATM and Bitcoin Vending Machines around the world! And Australians will soon be able to buy Bitcoin over-the-counter at newsstands across the country.
You can also buy Bitcoin using your bank account or debit card using a Bitcoin app such as Coinbase, Airbitz, or Mycelium. (When you join Coinbase using this link and buy $100USD (or equivalent) in Bitcoin within 180 days, you AND 5th Quill Studios will each receive a Bitcoin bonus equivalent to $10USD!)
Perhaps you’re someone who sells products online or owns a business, or maybe you’ve got a blog or media channel that you’d like to monetize? Accepting Bitcoin as payment is extremely easy to set up. In fact, one of the world’s largest e-commerce platforms—Shopify.com—has helped thousands of entrepreneurs, crafters, freelancers, and other merchants to take Bitcoin, all with just a few simple clicks!
Over a million items are available at discount retailer Overstock.com. Got a travel bug? Expedia.com is ready to book your dream trip with Bitcoin! Microsoft users can buy apps for Windows phones as well as movies, videos, and video games for Xbox One. Steam, the massively popular video game platform with 125 million users, announced in April 2016 that they too were accepting Bitcoin. Software & hardware vendors like TigerDirect, Dell, and Newegg are a few of the other bigger names. And several third-party services such as Gyft.com and Purse.io allow people to purchase gift cards for all kinds of stores—like Amazon and Target—using Bitcoin, often at a discount!
Here a just a few of the better resources available for Bitcoin enthusiasts—novice, expert, or anywhere in between: