WEBVTT

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Part 1, Bitcoin analogies

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Bitcoin is special. While not exactly like anything that has existed before, it can be compared to things you already know by using

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analogies. They aren't perfect. This video isn't about defining Bitcoin, but about making it a little bit more understandable.

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Bitcoin is like digital gold

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Bitcoin is scarce. It is expensive to produce. It is highly divisible and uniform. It can be transported cheaply through space and time.

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For these reasons, people treat it as a hard asset and store wealth in it.

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Bitcoin is like digital money

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Bitcoin has only a digital representation. It doesn't have any particular physical form. Its integrity is maintained by cryptography and

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consuming a lot of electricity.

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Bitcoin is like the internet

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Bitcoin consists of many thousands computers, called, nodes, communicating together, using the same protocol. Anyone can connect, there are

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no technical restrictions to participate in the network.

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Bitcoin is like a central bank

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Bitcoin maintains a database that represents a ledger. This ledger records all the Bitcoin that were ever created and all the transactions

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that were ever made.

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Bitcoin is like an auditor

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The Bitcoin nodes are verifyng the ledger all the time. They use transparent and neutral rules. If someone tries to sneak in bad data into

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the ledger, such as creating new Bitcoins outside of the schedule, or transferring someone else's Bitcoins, the nodes will immediately

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notice it.

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Bitcoin is like the law

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The nodes aren't merely verifying, they are also enforcing. Invalid data is not just immediately spotted, it is also immediately rejected.

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Any record that doesn't follow the rules will end up in trash. What is written, that happens.

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Bitcoin is decentralised

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Unlike everything mentioned so far, Bitcoin is also decentralised. It is probably the most decentralised system we know. There is noone

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that can break the rules or change them.

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Bitcoin is a decentralized hard asset that can be used for storing wealth.
