Decrypting Bitcoin: The Blockchain Technology Explained

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…

What is Bitcoin? What is a blockchain?

The Trust Machine -- how the blockchain technology behind Bitcoin could change the world (Economist magazine)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.”

Benefits of Bitcoin — Why Are Millions of People Using Bitcoin?

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:

How Can I Get Bitcoin?

Bitcoin ATM for buying BitcoinsYou 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!

Where Can I Spend My Bitcoin?

Bitcoin Accepted Here -- where to spend BitcoinOver 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!

To find more vendors who accept Bitcoin, visit UseBitcoins.info and check out the new, decentralized free market platform: OpenBazaar.

Learn More About Bitcoin! Resources, etc.

Here a just a few of the better resources available for Bitcoin enthusiasts—novice, expert, or anywhere in between: