Hey, in this video, I’m going to answer
the question what is a Bitcoin, as well as look into how does it work! Cryptocurrencies have exploded in popularity,
over the last decade or so. These days, everyone and their pets have seemingly
heard about crypto, DeFi, NFTs, and so on. As time goes on, however, the popularity of
the space is only growing and increasing – there are more and more talks about mass adoption,
and the integration of crypto into our everyday lives! Do you know where it all started, though? Well, haha, most people do – with Bitcoin.
However, what do you *really* know about Bitcoin? I mean, do you know who owns the most Bitcoin,
or when was Bitcoin created, in the first place? Those are just a couple of the questions that
we’ll answer today, in this video! Welcome to Crypto Finally Explained – the
most crypto-friendly educational YouTube channel for *actually* learning crypto! Here, I finally explain crypto topics using
simple animations, visual doodles, and real-life examples, so no matter if you’re five, or
seventy-five, you’ll be able to understand it! In this video, we’re going to look into
what is a Bitcoin. Specifically, I’ll tell you about the history
of this legendary cryptocurrency, what makes it special, and how it became a staple for
a trillion-dollar industry! Let’s get to it! In order to start figuring out what is Bitcoin
and how does it work, we need to go back in time, to 2009. This is the year when Bitcoin was created,
and launched to the general public. Before Bitcoin came to be, however, there
was first something called a “White paper”. This is a term that describes a document containing
all of the philosophy behind a specific crypto project – these days, most-all decentralized
finance platforms and tokens have White papers written about them, and Bitcoin was no exception,
either.
How is this White paper so important, you
might ask? Well, it can tell us a lot about two big topics
– who started (or, created) Bitcoin, and what’s the purpose of this project, in the first
place. If you love internet mysteries, you’ve probably
heard the name “Satoshi Nakamoto” before. This is actually a pseudonym of the creator
of Bitcoin, and not their real name – truth be told, to this very day, NO ONE KNOWS who
created Bitcoin! Even after all these years, the creator (or
creators?) has remained anonymous. For simplicity’s sake, I’ll be referring
to Satoshi as a “he”, for the rest of the video – it could, however, be a woman,
a group of people, or an entire organization! We’ll talk about Satoshi a bit more later
in the video, but for now, let’s focus in on the second question – WHY was Bitcoin created? Well, the answer might lie in the date of
its creation.
2009 wasn’t really a special year, globally
speaking. However, Bitcoin was launched on January 3rd,
2009 – so, at the very beginning of the year. What this means is that the actual project
was created a year prior. And, I have a feeling that I don’t even
really need to tell you what happened in 2008. That’s right – the global financial crisis. In a very specific sense, Bitcoin was the
result of this crisis.
When a cryptocurrency is created, the very
first block of its blockchain is called “the Genesis block”. If you’d like to learn more about blockchains
and how they work, I have dedicated videos on my channel, concerning the topic – check
them out! Focusing on what is Bitcoin and how does it
work, however, all that you need to know for now is that the creators of a cryptocurrency
– such as Bitcoin – can leave a human-readable message within that Genesis block. Satoshi Nakamoto did just that – his message
read: The Times 03/Jan/2009 Chancellor on brink
of second bailout for banks. It’s a reference to an article title of
The Times newspaper, from the day when BTC was launched.
As you might be able to tell, the title talks
about the Chancellor of the United Kingdom bailing out banks, after the global financial
crisis – since it’s widely accepted that banking institutions were a major element
of the crisis, in the first place, you can probably see where this is going. To circle back to the questions of what is
Bitcoin used for, and why it was created, the answer seems to be pretty simple – to
take some economic power away from banks and governmental institutions, and hand it back
to your common, everyday people. Bitcoin was initially meant to be a form of
digital money that is both completely private, as well as transparent, and not belonging
to any one entity – in other words, 100% decentralized.
It is widely accepted that, whoever Satoshi
Nakamoto was, he was very concerned with the state of the global economy, and how huge
financial institutions could weasel their way out of a major financial crisis that they’ve
caused, shifting all of the economic burdens that came with it onto the masses of innocent
people. Bitcoin was the answer to this – a way for
those masses of people to, for the first time, truly own their own money, and not have it
tied to the state or government. Of course, when talking about these things,
you could also question what is Bitcoin backed by, or how it tackles problems such as inflation
and regulations. These are topics for other videos, though
– today, our goal is to look at the basics of what is Bitcoin, and how it became the
global phenomenon it is today. If you’re enjoying this video so far, make
sure to give it a “Like”, and subscribe to the channel, to not miss out on future
uploads! Going back to the creation of Bitcoin, after
it was launched, Satoshi Nakamoto would still show up in various forums online.
He was an avid fan of cryptography, and would
constantly hang out in related online forums and discussion boards, talking with other
like-minded individuals, and trying to come up with what would eventually become Bitcoin. In fact, Bitcoin wasn’t even the first attempt
at creating a form of digital currency – it was simply the attempt that was successful. Pretty soon, however, Satoshi disappeared
– today, not only does no one know who he is, it’s impossible to say whether or not
he’s still alive, or active among crypto circles around the world. I mean, who knows – perhaps he’s a very
active member of the Bitcoin community, but no one could ever tell? Going back to the launch of BTC, you might
ask – how much was Bitcoin in 2009? Well, the truth is – fractions of a penny! BTC only started gaining price traction around
2011, two years after its inception. Even then, you could purchase multiple Bitcoins
with a single $1. You’ve probably heard about the legendary
story of a guy who purchased two Papa John’s pizzas for 10,000 Bitcoin, back in 2010.
While it was quirky and cool, it was also
a very significant moment for Bitcoin, this being one of the very first major events where
BTC was used to purchase actual, tangible real-world items. This event has become so notable, that there’s
now even a Bitcoin Pizza day being held, every year. That’s no wonder, really – today, those
pizzas would be worth over $200 million. It’s absolutely incredible to think about! Hearing all of these numbers being thrown
around, you might also ponder – who owns the most Bitcoin? Well, there are actually two notable parties
that need to be mentioned here.
As far as the public is concerned, a US-based
software company called Microstrategy is the largest BTC whale, holding nearly 130k BTC. When you learn about what is a Bitcoin, this
number really does appear to be mind-boggling! However, there’s another answer, too. It’s widely speculated that none other than
Satoshi Nakamoto himself is the largest holder of BTC – if the calculations are true, Satoshi
still holds over 1,1 million Bitcoin, spread throughout his wallets. If you’d like me to go deeper into this
topic, and explain why this is incredibly significant, let me know, in the comment section
below – I might consider making a dedicated video! Going back to the history of Bitcoin, and
skipping through some minor events, the popularity – and, consequently, price – of BTC grew over
the years.
The first major crypto boom happened in 2017,
and was followed by what we now call the Crypto Winter – a sudden price crash, and then a
few years of stagnation. Today, Bitcoin alone is worth nearly $400
billion (market cap-wise), and that's not to mention the rest of the cryptocurrency
industry. BTC paved the way for decentralized finance,
NFTs, crypto gaming, and a new form of finance, as a whole – the importance of all of these
things can’t be understated! Continuing on with the video, now that we’ve
covered the general history and background of Bitcoin, we should also talk about the
potential future of this cryptocurrency. In order to do that, though, we need to go
back to the question of how does Bitcoin work, to begin with. As mentioned earlier in this “What is a
Bitcoin?” video, BTC is completely decentralized and
anonymity-preserving. Meaning, the cryptocurrency can be traded
between two parties, and while all trades will be public and visible on the blockchain,
the actual participants will remain anonymous. This is done with the help of Bitcoin wallets.
If you’re wondering what is a Bitcoin address,
well, that’s just it – the term references a wallet address. It’s like a special string of numbers and
letters, used to identify you on the blockchain. When you perform trades, or send BTC to your
friends, only your wallet addresses will be visible – unless you tell the whole world
that THIS wallet address belongs to YOU, no one will know! Well, generally speaking, that is. Naturally, decentralization is another key
factor, as we’ve established earlier in the video. Bitcoin doesn’t belong to any single private
or governmental entity. This means that there’s no single point
of failure, either – in theory, this results in a fairer, more transparent financial system. If you’d like to learn more about the specifics
of decentralization and anonymity, I’ve recently made a video covering both of these
topics – check it out! Having said all of that, and now that you
know what is Bitcoin, how does it work, and what it’s used for, what’s next for this
cryptocurrency – in other words, what is Bitcoin’s future? Well, as you might expect, no one knows for
sure! However, if we were to take a look at the
history of Bitcoin, it seems that this cryptocurrency isn’t going anywhere.
Throughout the years, thousands of new crypto
projects have emerged and grown to become notable names in the industry. During all this time, though, Bitcoin has
always remained the No. 1 crypto asset, market-wise, as well as in many people’s minds, too. There’s even a term for that – it’s called
“Bitcoin maximalism”. As time goes on, Bitcoin is also getting progressively
more difficult to mine. Combine that with the fact that this crypto
asset has a hard cap of 21 million (that’s the total number of Bitcoin that will ever
exist), and you have an asset that’s becoming more and more scarce, yet seemingly also increasingly
more sought-after, as well. Whatever challenges Bitcoin might face in
the future, one thing’s for sure – if not for this cryptocurrency, I wouldn’t be making
this video, and you wouldn’t be watching it. Chances are that there wouldn’t be any DeFi
or other cryptos, either, at least not in the form that we know them now! With this industry constantly growing and
reaching new milestones, many enthusiasts believe that this is just the beginning of
a long and adventure-filled journey. Thanks so much for watching my video on what
is a Bitcoin and how does it work! We’ve covered everything from the inception
of BTC in 2009, all the way to the philosophy behind this crypto, and its impact on the
entire global financial market, too.
Make sure to subscribe to the channel, so
as to not miss out on future uploads, and I really hope to see you next time!.
