Bitcoin explained and made simple

bitcoin is a digital currency which aims to do away with all the problems we have paying for things online you may think that the system we have is pretty good but everything we buy today has to go through a bank or credit card company who take a cut of the transaction and who rely on our trust that they'll do everything right after a while those payments start to build up and added to that is security you have to trust your card company to keep your details safe many people have tried to work out how to have a payment system without that middleman but then there's another problem how do you prove that you've paid for something or even that you have that money at all without someone vouching for you it's so serious it has a name the double spending problem then in 2008 a solution was offered by an anonymous programmer going by the name of satoshi nakamoto nakamoto left a paper on a popular cryptography blog which proposed a system of currency that solved all of these fiddly problems his proposal was that instead of a bank or credit card company recording every transaction in one central ledger all of the users would record all of the transactions at the same time as a result any attempt to fool the community would be noticed and the payment rejected no one user government or bank can force a fee on a payment or control its flow the result is a cheaper quicker and easier way to spend money even across national borders so this is bitcoin and it's already starting to have an impact on people's lives within months of the proposal it was being used to buy and sell goods although not always from the most scrupulous of traders but it's not all shady businesses some shopping sites take it you can buy pints in london and even pay for your university tuition as you might have heard there are problems while some are profiting from getting involved early others are losing out from this volatile and young market and people are founding companies to buy up lots of bitcoins but as it's designed to have a limited amount ever in circulation that might cause problems down the road there's so much uncertainty around bitcoin some people genuinely think this is the future others are terrified it could destroy our economy but many from both sides agree that if we could get bitcoin to work or something like it if we can trust a digital currency to work without the middlemen then the way the world economy functions could be transformed for the better [Music] we all know that stephen hawking has worked on some of the biggest questions about our cosmos but what are those ideas

Channel: The Guardian

Views: 2,485,618

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Id: s4g1XFU8Gto

Length: 3min 25sec (205 seconds)

Published: Wed Jun 25 2014