WEBVTT

00:01.100 --> 00:03.593
Part 1, Bitcoin analogies

00:04.792 --> 00:13.427
Bitcoin is special. While not exactly like anything that has existed before, it can be compared to things you already know by using

00:13.627 --> 00:22.262
analogies. They aren't perfect. This video isn't about defining Bitcoin, but about making it a little bit more understandable.

00:25.020 --> 00:27.247
Bitcoin is like digital gold

00:27.747 --> 00:36.221
Bitcoin is scarce. It is expensive to produce. It is highly divisible and uniform. It can be transported cheaply through space and time.

00:36.421 --> 00:44.896
For these reasons, people treat it as a hard asset and store wealth in it.

00:47.620 --> 00:49.665
Bitcoin is like digital money

00:50.165 --> 00:56.234
Bitcoin has only a digital representation. It doesn't have any particular physical form. Its integrity is maintained by cryptography and

00:56.434 --> 01:02.504
consuming a lot of electricity.

01:05.220 --> 01:07.276
Bitcoin is like the internet

01:07.776 --> 01:14.448
Bitcoin consists of many thousands computers, called, nodes, communicating together, using the same protocol. Anyone can connect, there are

01:14.648 --> 01:21.320
no technical restrictions to participate in the network.

01:24.060 --> 01:26.287
Bitcoin is like a central bank

01:26.787 --> 01:31.800
Bitcoin maintains a database that represents a ledger. This ledger records all the Bitcoin that were ever created and all the transactions

01:32.000 --> 01:37.014
that were ever made.

01:39.740 --> 01:41.593
Bitcoin is like an auditor

01:42.093 --> 01:48.430
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

01:48.630 --> 01:54.967
the ledger, such as creating new Bitcoins outside of the schedule, or transferring someone else's Bitcoins, the nodes will immediately

01:55.167 --> 02:01.504
notice it.

02:04.260 --> 02:05.943
Bitcoin is like the law

02:06.443 --> 02:14.949
The nodes aren't merely verifying, they are also enforcing. Invalid data is not just immediately spotted, it is also immediately rejected.

02:15.149 --> 02:23.656
Any record that doesn't follow the rules will end up in trash. What is written, that happens.

02:26.420 --> 02:28.540
Bitcoin is decentralised

02:29.040 --> 02:35.365
Unlike everything mentioned so far, Bitcoin is also decentralised. It is probably the most decentralised system we know. There is noone

02:35.565 --> 02:41.891
that can break the rules or change them.

02:44.620 --> 02:49.417
Bitcoin is a decentralized hard asset that can be used for storing wealth.