Bitcoin Explained for Dummies

Zadavatel: Creative Digitus | 17.2.2021

Bitcoin is a cryptocurrency, often described as a type of money that is entirely virtual and digital. It's an online form of cash. You can use Bitcoin to buy products or services.

The physical form of Bitcoin that you usually see on the internet in the pictures is not a real Bitcoin - it is a novelty. There are some companies selling you the physical Bitcoin that looks like a big one dollar coin with a symbol of Bitcoin. The coin might be golden or just a fake metal. There are many merchants on Alibaba selling those products.

How does Bitcoin work?

People use digital wallets to store their bitcoins and also to spend them. With a mobile app, you can send or receive bitcoin quickly.

Every single transaction is recorded in a public list called the blockchain. That makes it possible to trace every bitcoin transaction anonymously. It also prevents people from spending bitcoin that they don't have.

Bitcoin mining

New bitcoins are created by miners. Miners are computers that solve complex mathematical tasks and are rewarded by doing that with new bitcoin. They also process transactions.

When people ask: what is Bitcoin, it might be challenging to explain. Instead of explaining how it works, it might be better to start saying the benefits that it brings. Bitcoin is a peer-to-peer network that stands apart from the traditional financial system.


There are many cryptocurrencies nowadays, and most of them are not valuable at all. Bitcoin is the most valuable cryptocurrency today. It was invented by Satoshi Nakamoto in 2008. Satoshi Nakamoto is a mystery because we don't know who it is or if it is a group of people. They left us a whitepaper with instructions what's the vision of Bitcoin and how does it work. You can learn about cryptocurrency from news, YouTube videos, podcasts, or bitcoin movies and documentaries. Or you can earn free bitcoin while learning.

Bitcoin's price

Bitcoin's price (BTC) went above 20 thousand dollars in December 2020 and during February 2021 hit 50 thousand dollars. It is a very volatile asset, and many investors made a lot of money from it, but many others lost vast amounts of money. There is very little regulation in the crypto space, lots of fake news, price manipulation, and scams.

Témata: cryptocurrency, bitcoin, money, finance, blockchain

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