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Here's the basic idea
Posted on: August 1, 2017 at 15:33:40 CT
Joeboo MU
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A bitcoin is a digital dollar, as opposed to a physical, paper dollar.
But what prevents someone from just copying and creating as many dollars as they want? Pure digital currency wasn't secure. People can copy & replicate files.
What bitcoin does is entice computers to slowly compute & churn through endless data...this data is a log of every one of the billions of bitcoins, ever since bitcoin #1 was created. It's a log of every bitcoin, who has owned it, who gave it to who. You can trace every single bitcoin ever made back through it's entire existence. And since there are millions of computers creating more bitcoins, there are millions/billions of copies of this log, so it can't be forged. It can't be hacked. If you change 1 log yourself, the other billion over-write it instantly with the correct info.
So if a bitcoin were a dollar bill, it would be a log of every single dollar bill every produced, and who has posesed it and when, and a log of when it changed hands and when.
Except as it becomes more and more popular, and more and more computers are creating them, they are created slower and slower.
Say the economy wants 1 new bitcoin to come into the economy every day. At one point, 1 computer created 1 bitcoin per day. But then 10 people wanted to do it, so it then took 10 computers 1 day, or each computer making 1/10th of a bitcoin per day. Now there's 100 million computers making bitcoins, so they each make 1/100,000,000 of a bitcoin per day.
But this is a good thing. The more computers that are processing bitcoins, the more secure it is. Its easy to hack 1 computer. Its harder to hack 10 computers. Its effectively impossible to simultaneously hack 100 million computers.
So the inflation is steady. It's pre-determined and it really can't be influenced by uncontrollable outside influences like paper currency can.
Edited by Joeboo at 15:36:17 on 08/01/17
But what prevents someone from just copying and creating as many dollars as they want? Pure digital currency wasn't secure. People can copy & replicate files.
What bitcoin does is entice computers to slowly compute & churn through endless data...this data is a log of every one of the billions of bitcoins, ever since bitcoin #1 was created. It's a log of every bitcoin, who has owned it, who gave it to who. You can trace every single bitcoin ever made back through it's entire existence. And since there are millions of computers creating more bitcoins, there are millions/billions of copies of this log, so it can't be forged. It can't be hacked. If you change 1 log yourself, the other billion over-write it instantly with the correct info.
So if a bitcoin were a dollar bill, it would be a log of every single dollar bill every produced, and who has posesed it and when, and a log of when it changed hands and when.
Except as it becomes more and more popular, and more and more computers are creating them, they are created slower and slower.
Say the economy wants 1 new bitcoin to come into the economy every day. At one point, 1 computer created 1 bitcoin per day. But then 10 people wanted to do it, so it then took 10 computers 1 day, or each computer making 1/10th of a bitcoin per day. Now there's 100 million computers making bitcoins, so they each make 1/100,000,000 of a bitcoin per day.
But this is a good thing. The more computers that are processing bitcoins, the more secure it is. Its easy to hack 1 computer. Its harder to hack 10 computers. Its effectively impossible to simultaneously hack 100 million computers.
So the inflation is steady. It's pre-determined and it really can't be influenced by uncontrollable outside influences like paper currency can.
Edited by Joeboo at 15:36:17 on 08/01/17
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Here's the basic idea - Joeboo MU - 8/1 15:33:40