Bitcoin
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BTC · 24w

Everything you’ve heard about Bitcoin is wrong

Everything you’ve heard about Bitcoin is wrong

By now you’ve probably heard a lot about Bitcoin. It’s a Ponzi scheme, a tulip mania, a bubble, a scam, but also somehow it’s supposed to be the digital gold and the future of money. It’s supposedly used by thieves and criminals, but also helps unfortunate people in hyperinflation countries like Venezuela survive the tragedy of a currency collapse. It’s been declared dead by the mainstream media over 300 times over the past decade, yet it still exists and refuses to disappear. Some people say they use it to pay for things, but you’ve probably never seen it accepted anywhere. This is all extremely confusing and intriguing at the same time and just googling the topic seems to make the confusion even worse. So what the hell is going on?

There’s no simple answer to this question (otherwise there wouldn’t be so much confusion), but it’s also not as complicated as it seems to be. See, Bitcoin is simply a network protocol. So first, let’s break down what a network protocol is.

Network protocols in a nutshell

Whenever you use a browser to access a website, your browser needs to somehow figure out where to find that website and how to ask for its content so that it can display it on your screen. This is being done under the hood using a set of so called network protocols. These protocols are simply an agreed upon rules on how computers talk to each other to exchange information. A gross oversimplification of this process in human language would look like this:

Browser: Hello, server at somedomain.com! I’m Firefox and and would like to see the cute-cat-752.jpeg file that you host, please!

Server: Hello, there! Here’s the content of the cute-cat-752.jpeg file that I have. It’s a JPEG file that is 841235 bytes large! It won’t change for at least an hour, so please don’t ask again during that period.

The above is actually an approximation of how the HTTPS protocol works at its core. It’s th...

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