This video is an animated conversation that explains what is Bitcoin and how it works. This is the part 1 of Bitcoins Office Series.
Transcript
Transcript generated by YouTube auto-captions. May contain errors.
well I see you're working very late tonight saving up to buy more physical silver no actually I'm staying late setting up a server Farm to mine Bitcoins Bitcoins what are bitcoins Bitcoins are a new peer-to-peer encrypted digital currency which has no Central Authority in a fixed Supply you said you were mining bitcoins what does that mean Bitcoins are designed to be similar to gold and silver it requires effort to produce them with Bitcoins the work is done by computers how can a computer mine something Bitcoins are mined by computers by running complex math calculations the Bitcoins are awarded on the basis of a lottery with a chance of winning increasing relative to hashing power but won't the world end up being flooded with Bitcoins no there is a fixed number that we ever be produced no more than 21 million can ever exist how can they enforce that because the network is peer-to-peer so every node in the network is aware of every coin and every transaction so what what's to stop them from being counterfeited they cannot be counterfeited because all Bitcoins must be verified by the existing nodes fake Bitcoins would be quickly rejected by the network but what is backing Bitcoins what gives them value why do Bitcoins need to be backed by anything let me ask you what is gold back with that's a silly question gold is gold it is not backed by anything then why does it have value gold has value because it is rare gold cannot be counterfeited gold is a store of value gold is portable and divisible lastly gold has value because people desire it for all of the above reasons so if Bitcoins are rare cannot be counterfeited a restore of value portable divisible and people value them why do they have to be backed by anything well since you put it that way I guess they don't but if people don't value them then how can they have any worth the fact is that people are very rapidly starting to Value them their price has risen in dollar term from 6 cents to $32 in less than a year but is that legal How can there be a digital currency that governments don't control there is nothing illegal about Bitcoins because no la on the books says anything about them but can't people use them for illegal purposes yes so what anything can be used for illegal purposes do you think that anyone has ever paid for illegal items using cash or even gold for that matter of course then does that make gold or cash evil of course not not even an imile would believe that so you can see that trying to smear Bitcoins is really just an effort to discredit them by the people who hate them hate them why would anybody hate them banksters banksters hate them because they cut the banks out how do they cut the banks out Banks take a piece of every digital transaction because they charge fees to process them bitcoin's only processing fee is voluntary and it ends up going back to the system in the next coins awarded how's that because Bitcoin miners are also the processes of the transactions so any fees awarded which are tiny are paid out to the miners who are keeping the system running so evil banksters and government leeches don't get a penny from the system correct well if that's the case then won't they try to stop it they probably will but since the coins are free to go anywhere in the world they will have a very difficult time of it how well has big media succeeded in stopping bit torren good point so I guess they may have to allow it or be left behind either way if it is going to be very interesting to watch true that kick back and pop some popcorn and watch the show popcorn in here yeah just set some over on those T 6990 video cards it will be done in no time LS