What is Bitcoin and How do i get it?

What is Bitcoin?

It was probably the greatest trade in all of recorded history.

In October 2009, a Bitcoin aficionado who went by the name of ‘Liberty Standard’ published the first bitcoin exchange rate. He arrived at the figure by dividing the cost of the electricity consumed by his computer over a 30-day period by the number of bitcoins it generated. 1,309 bitcoins to one dollar was the price.6 Liberty 

Standard was actually criticized for valuing bitcoins too high. Four years later, on November 29th 2013, one bitcoin was $1,242 – over 1.6 million times higher. A bitcoin was the same price as an ounce of gold.

If anybody managed to buy the low (which actually came in December 2009 at 1,630 bitcoins to the dollar) and sell the high, they made over two million times their money. In four years, one dollar became two million dollars.

Nice work if you can get it.

The story of Bitcoin is amazing – not just for the gains (and the losses) that have been made, not just because of the revolutionary technology, but also because of the human stories that have come about as a result.

There’s the developer in Finland who, trying out the tech, bought a beer from his buddy for some bitcoins. Three years later, his buddy sold those coins and bought a des res apartment in the trendiest district in Helsinki. There’s the computer nerd with an interest in economics who became the FBI’s most wanted drug dealer. And, of course, there’s the great whodunit.

Read More: How Bitcoin Could change Everything

Who invented Bitcoin? Who is Satoshi Nakamoto?

He has a Japanese name, a German email address and he uses British spelling. He has invented a new form of money that could change the world. He is worth almost a billion dollars. He has computer programmers the world over purring at the unhackable genius of his tech. Half the internet – as well as investigative journalists and forensic scientists, even – have been trying to figure out his identity for over three years. And yet still, nobody knows who he is.

I think I’ve cracked that, by the way.

The story of Bitcoin has everything from the hilarious to the mysterious to the audacious to the calamitous.

Genius computer hackers. Dogs with funny names. Cypherpunks. Cryptography. Financial systems. Governments. Organized crime. Attempted murder. Political insurrection. 


Inspiring bursts of generosity. Squatters. Poker players. City traders. And people just like you.

When you type a website address into a browser you might have noticed that the letters ‘http’ appear at the front. ‘Http’ stands for Hypertext Transfer Protocol. In typing an address you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is shared across the web.

Similarly, when setting up an email account, you might have noticed the letters ‘smtp’ – for example, ‘smtp.gmail.com’. SMTP stands for Simple Mail Transfer Protocol. 

SMTP is the protocol by which we send emails to each other. What actually happens when you send an email through Gmail to, say, someone with a Yahoo address is that a Google server reaches out to a Yahoo server and transmits a text file; then the Yahoo server says to its user, ‘you’ve got mail’.

So, a protocol is an agreed system by which information is shared across a network.

Bitcoin – with a capital ‘B’ – is another protocol. The function of the protocol is to send and receive payment information.

With Bitcoin, your computer reaches out to another user’s computer, gives it some binary gibberish proving you control X number of coins at this address and want them to increase the balance at that address.

The unit of money on the Bitcoin protocol is the ‘bitcoin’ (with a small ‘b’). As the dollar is the unit of money on the US banking network, so bitcoin is the unit of money on the Bitcoin system. So, Bitcoin is two things – a protocol and a unit of money.