The Byzantine general problem
This dilemma – how do you work together without knowing the extent to which the other parties involved can be trusted – has been known for some decades as the Byzantine General Problem . Translated to Bitcoin it comes down to: How do you know that there is no messaging with a Bitcoin transfer? That for example a smart hacker has not secretly written a program to spend every Bitcoin more often?
The architect of Bitcoin has found the solution for this and gave it the name: Blockchain . All computers worldwide that run a piece of special software together form that Blockchain. In short, it means that all transactions with Bitcoins are passed on to all those thousands of computers, so that every participating PC knows exactly which transactions have taken place. In short: if you know something yourself, you do not have to rely on someone else. How well this concept works could be deduced from the fact that the Blockchain has never been cracked. But more importantly, nobody has (in theory) undermined the logic behind it. Not even all power from governments and (central) banks. And that’s quite a thing. Call it revolutionary .
Technically, this system is fooled, the architect is also aware of this. However, only if you manage to put at least 51% of all those thousands of connected computers to your hand. This is not impossible at all, but is now extremely unlikely.
Is it starting to itch to experiment a bit with Bitcoins? First briefly back to the base. What is ‘money’?
Is Bitcoin also money?
Critics say: ” Bitcoin can never never be money, it’s nothing more than a row of ones and zeros on your computer. Whoever spends real euros on that is crazy! “Are those critics right?
Bitcoin is an experimental new currency that is actively being developed. Although it becomes less and less experimental as the more is used, you should keep in mind that Bitcoin is a new invention. The ideas that underlie it have not been tried before in such a system. How the experiment will end, no one can predict. – Source: bitcoin.org/nl/wat-you-know
To answer this question, we look at the function and criteria of money:
Function: What is the role of money ?
- Money is a means of exchange
- Money is a unit of account
- Money is a repellent (you can save it)
Criteria: What should money meet?
- Sustainable : money does not spoil
- Divisible : two half’s are worth exactly as much as a whole
- Portable : Always a change in pocket
- Scarce : Not easy to copy
Omg! All these matters apply to Bitcoin! So yes, this digital currency is fine as money to use. But check the quote above from the official Bitcoin.org website: It is still experimental. So do not suddenly go out of the bank like a silly one and buy Bitcoins for it.
Getting started with Bitcoin
You have just acquired some basic knowledge about the crypto currency. Tastes for more?Beautiful, enough for now. Let’s get down to business!
In order to start you need 2 things: First a wallet and then some Bitcoincentjes.
For the wallet you can install software on your computer, but you can also use an online wallet in your browser. (Comparable with mailing with a mail program on your computer or online via a service like Gmail.) A web-based wallet with a reliable reputation is Blockchain.info . When creating a wallet, you automatically receive a Bitcoin address. A sort of account number. As an example, this is an address from us:
Buy Bitcoins safely
To get Bitcoins (or Bitcoinents) you can go to an exchange. A good exchange is Coinbase.com where you can easily pay with iDeal. The Bitcoin amount is then transferred to your bitcoin address.
Are you still a bit hesitant and do you want a little ‘play money’ first? Send us a nice message (with your bitcoin address) and to the nicest messages we make a small donation.
This was the first part of the OneTime Bitcoin 101. In the parts that follow I will go deeper into the functioning of the Blockchain, the value as currency, Bitcoin versus the banks and Alt-coins: the alternative cryptocurrencies.
- Part 1 – Introduction
- Part 2 – The Blockchain
- Part 3 – Bitcoin as currency
- Part 4 – Bitcoin versus the banks
- Part 5 – Alt coins: the alternative cryptocurrencies
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