Bitcoin is largely an imaginary piece of code, with no intrinsic value. Gold has intrinsic value for use as jewelry, some in electronics, for making teeth, for coating mirrors, and a host of other possibilities. Silver has even more intrinsic value for medical uses, in film, in coatings for bearings, for it's heat distribution and electrical properties, etc. Bitcoins, gold, and silver all share one crucial aspect in common. They are all relatively rare.
Bitcoins are like the rewards for a correct answer to a certain math problem. Both the problem and the answer are completely unique. There will be a limit of about 21 million (the eventual exact number is 20999999.97690000) of these special solution rewards known as the “Bitcoin.”
Those dabbling in the complicated technicalities of Bitcoin, such as programmers and promoters, call it a “crypto-currency.” This invented term refers to the form of mathematics that generates the rarity behind the solutions that earn the Bitcoin rewards.
Nuts and bolts for Bitcoin look like this:
Bitcoin is often represented as BTC, or 1 BTC is 1 Bitcoin.
We can also deal with 0.1 BTC, 0.01 BTC as we would with say, U.S. dollars. $0.01 USD is also known as 1 cent. Similar for Bitcoins though, it has software behind it that allows for a very small denomination of a Bitcoin that looks a tad scary:
0.00000001 BTC.
or 100 millionth of a Bitcoin
This smallest unit of BTC is known affectionately as a “Satoshi” in honor of the genius that developed the whole code framework. Not that the use is popular, but we use the same names from the metric system when describing Bitcoin denominations:
CentiBitcoin is also a bitcent and looks like .01 BTC or 1 cBTC
MilliBitcoin is either a bitmil or mbit: .001 BTC or 1mBTC
That is about all we will need for the foreseeable future. For the purists though, the smallest, fashionable BTC is the microbit or ubit with .000001 BTC or 1 uBTC.
If we find ourselves trading in uBTC's soon then let's hope we all stocked up on BTC's before the attack of the 5 zeros!
We can now buy things with Bitcoins. No cars, planes, diamonds, or furry dinosaur feet are available yet with Bitcoins because it is too new, not fully understood, and somewhat risky. However, many retailers are coming around to Bitcoin; here is what a Bitcoin shopping payment looks like from a website called BitcoinIn:
Notice how the prices already use .001 BTC format. The reason is, Bitcoins exploded in value compared to other currencies. We value Bitcoins in our national currencies. If we live in the U.S., our national currency is the U.S. dollar or USD for short. Europeans, for the most part, use euros or €.
Out of the gates, Bitcoin was a 6-cent weakling with 1 BTC being priced at 0.06 USD. So the same items we now see priced at 0.294BTC would have been around .416 BTC in Bitcoin's toddler days of 2009-2010. Now that Bitcoin is a fast growing online option for payments, we can expect to see it continue to go deeper into the bitcent, mbit and even ubit prices.
Keep this impressive example in mind for a later section explaining why Bitcoin is one of the secrets to personal and financial freedom.
Bitcoins are like the rewards for a correct answer to a certain math problem. Both the problem and the answer are completely unique. There will be a limit of about 21 million (the eventual exact number is 20999999.97690000) of these special solution rewards known as the “Bitcoin.”
Those dabbling in the complicated technicalities of Bitcoin, such as programmers and promoters, call it a “crypto-currency.” This invented term refers to the form of mathematics that generates the rarity behind the solutions that earn the Bitcoin rewards.
Nuts and bolts for Bitcoin look like this:
Bitcoin is often represented as BTC, or 1 BTC is 1 Bitcoin.
We can also deal with 0.1 BTC, 0.01 BTC as we would with say, U.S. dollars. $0.01 USD is also known as 1 cent. Similar for Bitcoins though, it has software behind it that allows for a very small denomination of a Bitcoin that looks a tad scary:
0.00000001 BTC.
or 100 millionth of a Bitcoin
This smallest unit of BTC is known affectionately as a “Satoshi” in honor of the genius that developed the whole code framework. Not that the use is popular, but we use the same names from the metric system when describing Bitcoin denominations:
CentiBitcoin is also a bitcent and looks like .01 BTC or 1 cBTC
MilliBitcoin is either a bitmil or mbit: .001 BTC or 1mBTC
That is about all we will need for the foreseeable future. For the purists though, the smallest, fashionable BTC is the microbit or ubit with .000001 BTC or 1 uBTC.
If we find ourselves trading in uBTC's soon then let's hope we all stocked up on BTC's before the attack of the 5 zeros!
Bitcoins In Use
We can now buy things with Bitcoins. No cars, planes, diamonds, or furry dinosaur feet are available yet with Bitcoins because it is too new, not fully understood, and somewhat risky. However, many retailers are coming around to Bitcoin; here is what a Bitcoin shopping payment looks like from a website called BitcoinIn:
Notice how the prices already use .001 BTC format. The reason is, Bitcoins exploded in value compared to other currencies. We value Bitcoins in our national currencies. If we live in the U.S., our national currency is the U.S. dollar or USD for short. Europeans, for the most part, use euros or €.
Out of the gates, Bitcoin was a 6-cent weakling with 1 BTC being priced at 0.06 USD. So the same items we now see priced at 0.294BTC would have been around .416 BTC in Bitcoin's toddler days of 2009-2010. Now that Bitcoin is a fast growing online option for payments, we can expect to see it continue to go deeper into the bitcent, mbit and even ubit prices.
Keep this impressive example in mind for a later section explaining why Bitcoin is one of the secrets to personal and financial freedom.
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