I go and welcome to the very first lecture where I am going to teach you all about Bitcoin.
So first up, guys, I want you to open coin market cap dotcom. This is going to be a major resource throughout this entire uni course. So in the resources boxes here, you will see a link. This is called market cap, dot com. I want you to open it up and you should have the page pop up in front of you, just like it has here. Now, coin market cap, dot com lists, and every single cryptocurrency in existence. The current price, the volume, circulating supply, and lots of other really good information will be referred to this a lot throughout the duration of this course. So make sure you keep it open. And it contains a lot of good information if you ever want to go and have a look at it a bit more. Okay, so let’s get straight into it, guys.
What is Bitcoin or Bitcoin?
Is this digital thing that somehow still seems to keep going up in value? It keeps popping up in the media. It keeps getting shunned by bankers. It keeps getting shunned by governments. So what the heck is it? Well, let’s have a little bit of a closer look. If we click on Bitcoin at the top, we can see it’s currently trading for eight thousand US dollars. Wow, that is crazy. That’s a lot of money. And guess what? Just one year ago. Let’s have a look. Just one year ago, Bitcoin was trading for 734 dollars. So that’s over a 10 times increase in price in just one year.
So what does it keep going up in value?
Why do we keep hearing about it?
We’re going to get into that in just a minute. But first off, I just want to show you some really basic things that would give you a good understanding of not only Bitcoin but for all cryptocurrencies So the first thing I want to show you is something called the market cap. Now, what the market cap actually is, and this is a term that’s used in the stock market a lot, is it’s purely just the circulating supply of a of a particular asset, say, a stock or a share, or in our case, a cryptocurrency multiplied by its current price. Let’s just do a quick calculation. So the current market capital of Bitcoin is one hundred and thirty three billion dollars, one hundred thirty-three point eight dollars billion, and the current price is eight thousand and twenty. So if we have a look over here, we can see the circulating supply. Now, the circulating supply of bitcoin means the amount of Bitcoin out there in the open market that can be bought and that can be sold. Now, the maximum supply is the maximum amount of bitcoin that will ever exist. In fact, it’s actually written in the Bitcoins mathematical code that no more and no less Bitcoin will ever exist. Okay, so we know what the maximum supply is, but we are only concerned again by that circulating supply because that’s what’s there out in the market at the moment. We don’t want to worry about the maximum supply just at this point. So let’s do a quick calculation to make sure that we know how this market capital actually works. So multiplying the circulating supply to 16, six nine three six one to buy the current price, which is eight thousand and twenty dollars, we get one point three, three or 133 billion dollars.
That’s how easy it is to work at the market capital.
In the market capital is a good way of gauging just how big a certain company or certain cryptocurrency is. Now, Bitcoin is the numero uno. If we come back here to the main page, we can see bitcoin is number one. It has a current market cap of hundred and seventy-nine billion dollars Australian. But we generally like to look at things in US dollars because the US dollar is a good global currency to compare every other cryptocurrency to. So you have Bitcoin at 136 dollars billion, Ethereum at 35, and bitcoin cash at twenty. Nothing comes close to Bitcoin. It is the biggest, it is the oldest, and it was the first. So with that out of the way, let’s go and have a little bit more of a look at what is Bitcoin and
how it’s actually used Bitcoin.
So you’ve come to this course because you want to learn more about Bitcoin, you want to learn more about cryptocurrency, and potentially you want to even learn how to invest in these brand-new amazing asset classes. Well well, you’re not the only one in front of you is a Google trend search for the word Bitcoin overthe past five years. Now, as you can see, there is a general trend upwards.And in fact, in the last couple of years, we can see almost an exponential curve in the amount ofpeople searching for Bitcoin.So, again, you’re not the only one.And this really is starting to become a global phenomenon.Now, here we have a curve that represents the amount of transactions that are happening on the Bitcoinnetwork over the past five years.Again, we are starting to see an exponential increase in the amount of transactions.
What’s that mean?
It means more people are using Bitcoin, more people are buying it, more people are transacting with it, more people are sending it to one another.The Bitcoin network is getting busier and busier by the day.Now, here we have the amount of wallets created.What a wallet will get into that in just a bit.But this, again, is a five year graph showing the number of wallets that are being created on theBitcoin network every day.And again, it’s an exponential curve.In fact, it’s nearly exactly the same as a number of transactions.So we can see these two bits of data correlate that show more people are becoming active in Bitcoin,more people are downloading these wallets and using them.And overall, more people are just starting to get involved in using Bitcoin and cryptocurrency every day.
- OK, so let’s say you buy some Bitcoin.
- What do you do with it?
- Well, you can spend it now.
We are in the early days and not a lot of places take it.
Yeah.But more and more are coming every day in front of you is a map of downtown Sydney’s CBD.All these places on the map are places that accept Bitcoin as payment.So instead of you using a debit card, you can use your phone.And no, it’s not linked to your bank and it’s linked to your Bitcoin wallet.There is no bank.So when you have Bitcoin, you are the bank.You can walk into these one of these places.Let’s have a little bit of a closer look and let’s find somewhere.So let’s just say we want to go to a cafe.We can walk into a greenhouse cafe, we can buy a meal and we can pay for it in Bitcoin without anybank or any financial institution having to be involved because bitcoin is decentralized.You are the bank.You are the wallet. So what else can you do with Bitcoin?Well, you can pay your bills with it.Over here on living room of Satoshi, an Australian based company and site, you can pay for your billsusing Bitcoin with BP.You can pay your credit card, you can pay, but you can send Bitcoin straight to your bank accountif you want to convert it to Australian dollars.So here we have Bitcoin ATMs in Australia.So what the heck is a Bitcoin ATM like?Bitcoin ATM is where you can walk straight up to it.You can feed it Australian dollars.It will bring you out a receipt with the amount of Bitcoin on a wall or for you.So it basically goes and buys some Bitcoin from an exchange for you.Prince, you had a receipt and gives you your bitcoin and the opposite can be used as well.You can scan your QR code or your wallet and you can get Australian dollars straight out of the ATM.So I know this seems a bit overwhelming and we will get into the technical detail a little bit more.But just quickly, how does Bitcoin work?Well, it works on a decentralized system.So Bitcoin is basically a program that runs over the Internet.There are miners around the world.There are nodes around the world that verify these transactions.So at the moment when we have a bank, a bank is a centralized institution that manages our money forus.They use databases.They use a lot of human processing to process transactions, to generate loans, et cetera, et cetera.So this decentralized system works by basically managing the protocol, the Bitcoin block chain that’srunning over the Internet.So if I send a transaction to you, if I get my phone with my Bitcoin wallet and I want to send a transactionto you, there are nodes all around the world.Anyone can be a node.And there are these special miners that verify these transactions for.So instead of that bank being needed to be used without that centralized institution to be used, it’scompletely decentralized.What you’re doing right now in front of you are live Bitcoin transactions happening on the Bitcoin network.See this every single time one of these goes past.This is someone in the world sending Bitcoin to someone else.
What are you seeing here with these codes?
And these numbers are Wallet A and will it be and what are you seeing over here?Is the quantity of Bitcoin being sent?This is live.This is the amazing thing about Bitcoin, the network that operates Bitcoin or the block chain is public.We can see anything happening on the Bitcoin network at any time.We don’t know who owns these wallet addresses because Bitcoin is pseudonymous, which means that wecan see how much money people have in their Bitcoin wallet.So we can see how much how many transactions happenBut we don’t know who owns them unless that person explicitly says that they are in this particularBitcoin wallet.So this is amazing stuff, guys.This is live 24/7 transactions happening on the Bitcoin network right now.
So how do these transactions get confirmed?
Well, there’s two ways.It is nodes and there’s miners.What are you seeing in front of you is a picture of a Bitcoin mine located in China.So a Bitcoin is basically a bunch of parallelled computers that have been set up that run a specialclient to verify transactions on the network, basically without getting too technical.These miners compete with the amount of processing power they have if they win the little competitionthat’s run in the mathematical code, in the background, they get awarded in Bitcoins.So when they get awarded bitcoins, the circulating supply increases as it slowly leads up to that maximumsupply.Now, the second way is by running a node.Now, miners and nodes are very different, but anyone can run a node.
You can download the Bitcoin core.
- It runs in the background of the computer and it helps to verify transactions on the network and it helps to keep the Bitcoin network strong.
- It’s extremely decentralized and bitcoin is spread all over the world.
- Now, this is a pie chart of the biggest miners operating in around the world.
- Now, the size of the pie chart basically is the size or the control that certain mining operations has over.
- And in fact, as Bitcoin grows and as more people use it, more processing power is being required to make it profitable for the miners.
- Kristie, these processes and these computers use so we can see here we’ve got Bitcoin, Russia, Bitcoin, India back, Paul, Bitcoin, dot com, these are all these major miners around the world.
- But again, as Bitcoin grows and it requires more energy and more processing power, it is becoming more and more difficult for everyday Joes to run a Bitcoin mining network and to actually make enough revenue for it to be profitable.
- Back in the old days, anyone could run a Bitcoin mining operation.
- And people were making hundreds of bitcoins back when Bitcoin was really, really cheap quite a few years ago just by running a mining operation.
- But again, it’s becoming very competitive based on the processing power that’s being required to verify these transactions.
So here we have the nodes that are running around the world so we can see there’s a heap in the UnitedStates and some in South America.There’s a lot around Europe and there’s some in Australia.Now, these nodes, as we talked about before we’re going to do is download a Bitcoin client core.You don’t get any reward for it, but you’re helping to contribute to the strength of the Bitcoin networkand you’re doing something good for Bitcoin.Yael’s you’ll learn over time that Bitcoin has very the community is very passionate about Bitcoin becauseof its decentralized nature, its freedom.People say Bitcoin is freedom.
They see it as a way to get away from having to use bank accounts because anyone can create a Bitcoinwallet, which is just absolutely amazing.It doesn’t matter who you are and all you need is a phone.So a bit more about how bitcoins are actually created.So basically the code that runs over Bitcoin or the script that runs on the coins has been mathematicallyprogrammed to produce bitcoins at a certain right now it’s done this to stop any form of inflation.
Bitcoin is inherently programmed and mathematically designed to stop inflation and to be deflationary.So here we have a graph that represents the amount of bitcoins that are being created over time.So we can see back in 2009 when Bitcoin was first released up to about now.So about eight years later, if we draw a line right up here, we can basically see that there’s about16 million bitcoins have been released.
Now you can see that curve is starting to slow down, right.So every few years, the amount of bitcoins that are being produced slows down.So instead of a traditional central bank that prints money into circulation that can actually controlinflation, bitcoin, you cannot control the inflation.These numbers of bitcoins that are released is written into the code.No one can modify it.No one can change it.
So this is the amazing thing about Bitcoin.And this is part of the reason why Bitcoin is going up so much in value at the moment is the productionof bitcoins is starting to slow down.So coming back over here to coin market capitalism, these period along here from about 2013 up to about2015, a lot of bitcoins were being created.
And because we have supply and demand economics that control the value of Bitcoin, there was a lotof supply coming into the market.But the supply is starting to slow down and the demand is starting to go up, which is what Bitcoinis going up so much in value, so quick.Now, remember how I said before that Bitcoin more addresses were public and that you can view any dataand any statistic on the Bitcoin network at any time?Well, what are you seeing in front of you is the top 100 richest Bitcoin addresses in the world.So these addresses, these Wollard addresses are basically like think of it like your home address,but for your bitcoin.
So with a traditional bank, you have an account number, you have a baby, you have these details thatpeople need to send you money or your Bitcoin address is just like your account number with your bank.Except it doesn’t start with the bank.It sits with you.You control it, it’s on your phone or it’s only computer.No one else is in control other than you.And without the private key, which will get into a little bit later, the private keys, differentto the wallet, no one can touch your bitcoin.It is on hackable and it is immutable.
So let’s check out some of the addresses so we can see his top address has forty six thousand bitcoins.Well, guess how much that is in US dollars, one point one billion dollars of Bitcoin.Let’s have a little bit of a look.More will click on this address and we’ll have a look at some of the other information.So what you’re seeing here is basically the transactions that happened through this wallet address.Now, again, Bitcoin is public.Everything on the Bitcoin network is public information.Anyone can view this at any time.
This QR code is merely just a quick way to get this person’s address.I could see this person Bitcoin if I wanted to.I could scan the QR code.I get the wallet, address Crockett’s and then Bitcoin.Now, I’m not going to in fact, I wish they’d send me some — bitcoin, but we can just see how muchmoney they have and all the transactions.Now, what are you doing in front of you is all the transactions that this person has done out of thiswallet address.So truly amazing stuff, guys.Now, again, Bitcoin is pseudonymous.
We don’t know who owns this wallet address.We merely know it exists and we can really see all the data inside it.If this person came out and said, I own this wallet address it is mine, then we would know.So how do we create a wallet and what’s all this wallet stuff, what we’re going to get into that morelater on.But I just want to show you how easy it is and how amazing it is and why cryptocurrency and Bitcoinare going to change the world.So in front of you, you’re seeing all the information I need to create a Bitcoin.What I’ve put in my email, I’ve put in a password.I’ve agreed to the terms of service continue.Now watch just how easy this is and we’re done.That took five seconds.
I now have a bitcoin wallet on block chain dot info.Isn’t that incredible that you all it took it didn’t require me to register my name.It didn’t require a passport.It didn’t require a birth certificate.Nothing.All I had to do was put in an email, a password and boom, I have a bitcoin.And to be honest, most other Bitcoin wallets don’t even require you to do that.So now all I need to do if I want to request some Bitcoin or want someone to send me some Bitcoin,I just click on request.And there is my unique wall address that that address belongs to me.It’s my almost like my account number.
No one knows who owns this unless I publicly say I own this address.But it’s my address.Now, what if I just want someone to send a QR code?Well, there we go.QR code.Now, if I have a Bitcoin wallet app on my phone, we’ll have to do is skin a QR code and I can sendsome bitcoin to it in about a minute.So here’s an example of a Bitcoin or a phone.I’ve got multiple wallets on my phone.This is how amazing it is, that QR code.There is all you require and that Bitcoin address.I can send Bitcoin to you.I can send Bitcoin to my friends, to my family, to an exchange, whatever I want to do that is Bitcoin,and that is all cryptocurrencies are based on that same amazing revolutionary technology.So, guys, I really hope that information helped you learn a bit more about Bitcoin.And we’re going to go more into blockchain technology.That is the fundamental underpinning behind Bitcoin in late elections.So with this election out of the way, let’s move on to Ethereum.