To say that Bitcoin is hot right now would be an understatement. In less than 10 years, Bitcoin has evolved from a fringe technology to one of the most talked about innovations we've ever seen.
Bank banks ignored it for a few years but now they've realized what everyone else has: it's not going anywhere. The people who spent their time calling Bitcoin a repeat of Tulip Mania are now eating their hat as they shift their portfolios around to make room for cryptocurrencies. And the governments who had hoped it would go away, are frantically trying to figure out if, how, and when it should be regulated. As Bitcoin continues to move into the mainstream, many are left with questions. What is Bitcoin? How does it work? Why is it valuable?
To answer these and many other popular questions, we sat down with Paul Puey, CEO and co-founder of Edge.
What is Bitcoin?
- Decentralized digital currency
- Payment network
- Unique because people can send, hold, receive value without 3rd parties
What is Blockchain technology?
- Underpins Bitcoin the currency
- Immutability – very difficult to mutate
- Fault tolerant – distributed
- Consensus mechanism
What is Bitcoin Mining?
- Thousands of computers playing a “game”
- Rules that must be followed
- Computers are trying to solve a problem
- Reward is paid in cryptocurrency
- Verified by other computers
- Where new Bitcoins come from
Who Invented Bitcoin?
- It remains unknown
- Goes by the name Satoshi Nakamoto
- Originally published white paper in 2009
- Open source means it doesn't matter who originally invented it
What gives Bitcoin value?
- Free market – supply and demand
- Limited supply – unlike other fiat currencies
- Digital gold – for the modern age
What if Bitcoin Crashes?
- Defining “crash” is difficult
- Historically, it's dropped but eventually comes back
- Crashing is always possible
- Going to zero is extremely unlikely
What's the future of Bitcoin?
- Blockchains, tokens, etc. driving value
- Decentralized applications will replace traditional financial applications
- Bitcoin is the anchor