This is an attempt at explaining Bitcoin for newcomers from a non-technical point of view.
There is a lot of confusion about what it is and is not and I would like to share my perspective. I welcome additions and or/corrections and criticisms as I too am trying to expand my understanding by attempting this post.
Bitcoin is a way to transfer value from one location to another fast and reliably, and without the need to rely on a third party like a bank. The higher authority here is computer calculations and as you know those are extremely accurate. As a result, it costs less to make payments than traditional banks because there are fewer issues with the payments. This is valuable in and of itself but perhaps more importantly, it allows you to hedge against inflation by storing value.
As the US government prints more and more money, the value of the USD decreases and inflation increases. Storing value is like buying gold, or better yet, buying a house as an investment. The idea being that by the time you need to sell (far in the future) it is worth much more than you paid and can buy at least the same amount of goods if not more as you could when you invested. While, in contrast, if you just held on to your Dollars you would undoubtably be able to buy less than before due to inflation.
Last but not least, unlike houses and gold, which can be created with hard work, bitcoin is capped at a supply of 21million. Imagine if there was a cap on how much gold or how many houses there were in the world? The price of those things would have to only go up over time. This is the fate of bitcoin. The other issue with houses and gold as stores of value is the fact that they’re very hard to divide. Bitcoin is extremely divisible. Imagine if you could buy just $5-$10 of gold or a house whenever you got some spare cash? It would certainly do a lot better over the long term than a savings account.
PS. The 1% in this country that hold all the wealth want nothing more than to keep it. If bitcoin makes it big, it will be a major rebalancing of that equation as a lot of us early adopters become rich. It’s certainly not too late and all it needs to succeed is for enough people to believe in it. We’re getting there and the more informed people are, the better progress we’re making towards this becoming an integral part of the international monetary system.
Please feel free to message me with any questions I’d be happy to field them.