140 lines
4.4 KiB

00:01.100 --> 00:04.393
Part 3, Frequently asked questions
00:07.100 --> 00:09.775
Why won't something else replace Bitcoin?
00:10.975 --> 00:17.600
In order for something to replace Bitcoin as a savings mechanism, it would need
to provide similar and even better properties. While some
00:17.800 --> 00:24.425
"cryptos" appear to
be scarce and easy to transport, none of them have the level of
decentralisation of Bitcoin, and that means their rules
00:24.625 --> 00:31.250
could change when under
pressure. A focus on decentralisation requires sacrifices in other aspects of
the system, and other projects are
00:31.450 --> 00:38.076
not willing to make these sacrifices.
00:38.276 --> 00:45.836
The decentralisation of Bitcoin goes beyond the mere technical and
organisational. There is also a culture of decentralisation, which acts
00:46.036 --> 00:53.596
attempts to centralise. There could be something else in the future which is
better than Bitcoin, but as time goes on it is less
00:53.796 --> 01:01.356
and less likely. It is less
likely now than it was five years ago, for example.
01:03.100 --> 01:08.452
If Bitcoin is so secure, why are there so many reports about people losing
their money?
01:09.651 --> 01:18.037
In order to benefit from Bitcoin's security, you need to follow the five
principles of Bitcoin mentioned in an earlier video. Usually, when
01:18.237 --> 01:26.622
you hear
about Bitcoins being stolen, the people involved violated principle number two:
not your keys, not your coins. They entrusted
01:26.822 --> 01:35.207
their keys to someone who doesn't
know what they are doing, they left it in an unsecured computer, or their keys
got damaged beyond repair.
01:35.407 --> 01:43.793
It's similar to someone putting a massive lock on
their house door, but then leaving the lock open when leaving the house.
01:45.539 --> 01:51.212
If Bitcoin consumes a lot of electricity, do I have to worry about my
electricity bill?
01:52.411 --> 02:00.827
When Bitcoin was originally launched in early 2009, there was only one software
doing all the work. Gradually, specialised software
02:01.027 --> 02:09.442
developed for the
individual activities involved in the network. The, nodes, verify the ledger
and enforce the rules. The, wallets, keep
02:09.642 --> 02:18.058
your private keys secure and initiate
transfers on your behalf. And finally, miners, which consume elecricity and
provide security for
02:18.258 --> 02:26.673
Bitcoin. In the meantime, mining is a business like any
other. Miners run in data centers and in special containers which can move to
02:26.873 --> 02:35.289
wherever cheap energy is available.
02:37.019 --> 02:38.436
What is Blockchain?
02:39.636 --> 02:48.763
Blockchain is a special type of database for decentralised systems. Parts of a
blockchain can be operated by different organisations, and
02:48.963 --> 02:58.091
don't need a
hierarchy of permissions. Bitcoin is a first practical example of a blockchain,
and some would argue the only one actually
02:58.291 --> 03:07.420
delivering on its promises. While
important for Bitcoin, it is not the only component necessary to achieve
decentralisation in practice.
03:07.619 --> 03:16.748
The use of a blockchain in systems which do not
need both high security and high decentralisation is of a dubious utility.
03:16.947 --> 03:26.076
databases or distributed data stores may be a better fit for such
projects. Compared to them, a blockchain is slow and expensive.
03:27.819 --> 03:30.867
Why do I have to wait for an hour for a transaction?
03:32.067 --> 03:40.179
Once you send or receive a bitcoin transaction, usually you have to wait for
about an hour for the transaction to "confirm". For the
03:40.379 --> 03:48.492
blockchain to do its
thing, about an hour needs to pass to ensure there is nothing fishy going on.
This is one tradeoff Bitcoin uses for
03:48.691 --> 03:56.803
its high security. So how can you
then use Bitcoin for all kinds of payments if you have to wait for an hour? The
solution Bitcoin offers
03:57.003 --> 04:05.115
is scaling in layers. You can think of these layers as
different forms of Bitcoin. The first layer, which is what we have been talking
04:05.315 --> 04:13.427
about so far, can be thought of as a settlement layer. On top of it, other
layers with different features are being built. One of the most
04:13.627 --> 04:21.739
popular ones is
the lightning network, which allows small instant payments.