1.8 KiB

Part 1, Bitcoin analogies

Bitcoin is unlike anything that has existed before, but from some points of view it is similar to things we are already familiar with. In this video some of these similarities are introduced and Bitcoin will be compared to things you already know.

Bitcoin is like digital money

This is the most obivious analogy. Bitcoin is a form of value that can is identified by its digital properties.

Bitcoin is like digital gold

Another often used analogy. Bitcoin is used as a store of value. It is scarce. It is expensive to produce. It is a commodity, what is Bitcoin isn't determined by a law or by a contractual arrangement.

Bitcoin is like the brain

Similarly as a brain consists of cells, Bitcoin consists of nodes (computers). The functionality of the brain isn't located in any single cell, but in the cells working together. Each node contains the exact copy of a consensus, like each cell contains a DNA. Bitcoin's nodes also work together to form Bitcoin.

Bitcoin is like a central bank

Just like central bank has a ledger recording how much money is created, how much there is in each account and how it is transferred between the accounts, Bitcoin also has a record of these events. The main difference is that a central bank is, well, centralized, having a formal group of people making decisions, Bitcoin is decentralized and there is no such group of people.

Bitcoin is like the internet

Internet allows people to connect their computers together and exchange information. Bitcoin allows people to connect their computers and exchange value.

Bitcoin is like an auditor

Bitcoin has thousands and tens of thousands of computer verifying all the times that the records are adhering to the rules.

Bitcoin is like the economy