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cryptocurrency

The 3 big benefits of bitcoin & crypto

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You can barely get through a convo these days without mentioning Bitcoin or cryptocurrency. Onomy is breaking down what exactly cryptocurrency is and what crypto means in this video. New videos on crypto uploaded every week!

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There’s a LOT of hype around Bitcoin & Crypto… but why? It goes beyond the “getting rich quick” scheme that so many have fallen into. This is REAL tech that can have some pretty big implications for the future. 

 

To understand why these have become so popular in the past few years, we’re breaking down some of the main benefits (& a few downfalls) in this lesson.

 

Benefit 1: Bitcoin is “decentralized”

 

We dive into this more in our “what is Bitcoin?” lesson, but it’s one of the biggest reasons why people love bitcoin (and other cryptocurrencies). Because traditional money is controlled by banks and governments – which makes it a “centralized” currency. But Bitcoin is not controlled or regulated by any single entity like a bank – which makes it a “decentralized” currency. Having no banks in control can make sending and receiving money cheaper, faster, easier & more secure.

 

BUT keep this in mind: since Bitcoin & other cryptocurrencies aren’t institutionally or legislatively backed; it can make them unpredictable, volatile, and risky. 

 

Benefit 2: You can’t counterfeit a Bitcoin or cryptocurrency

 

Paper currencies, credit cards, and checks can be counterfeit. Ever checked your credit card statement to see thousands of dollars charged to a random Home Depot in Kansas City? Oh, just me? Well it sucks when that happens.

 

One cool thing about Bitcoin is that it solves what’s called the “Double Spend Problem” – meaning fake Bitcoins are impossible to create. Actually, counterfeiting any cryptocurrency is impossible!

 

Here’s how the Double Spend Problem works: think of digital money like a computer file. Technically it would be easy for somebody to just “counterfeit” it by copy and pasting the file. Before Bitcoin, the solution was for banks to keep track of the money in everybody’s accounts, so that nobody could spend money twice.

 

The way Bitcoin solves the problem is slightly different. Bitcoin makes all accounts and transactions public – but doesn’t show private details like your name. Since account balances are public and computers all over the world are constantly checking and verifying these accounts, it would be clear if someone tried to use the same money twice.

 

HOWEVER, we have another thing to be aware of here. Since cryptocurrencies like Bitcoin don’t have names attached to them, meaning that users are identified by their public key address rather than their name and social security, cryptocurrencies can be an easy tool for money laundering, tax evasion, and illegal trade in drugs and weapons. Yeah… not cool.  Clearly a downside at this stage since crypto is not regulated (and that’s kind of the whole point).

 

Benefit 3: It’s SECURE!

 

There are HUNDREDS of BILLIONS of dollars stored in Bitcoin, so it needs to be extremely secure. But how exactly does Bitcoin ensure security? Well, it uses something called cryptography (a fancy word for super strong computer code) to securely send payments.

 

That’s why Bitcoin is called a cryptocurrency. The code it takes to send money is so strong & secure that hacking it is virtually impossible – in fact, it has never been hacked!

 

Ok so what exactly is “cryptography”?

 

It’s pretty complex for those of us who aren’t math or computer science wizzes, but basically, cryptography is a technology that protects information through very complex math functions. 

 

Bitcoin uses strong cryptography to protect your account and let you securely send money. It’s designed so that nobody can hack your account, and it prevents the wrong person from receiving your money! 

 

All in all, crypto is pretty revolutionary when you think about all of the use cases & problems it can solve. That’s why a lot of people are so excited about it. But, despite its revolutionary-ness, it’s so new and still largely unregulated, which can pose a lot of risks. 

 

So regardless of what happens and where this technology takes us (it is continuing to evolve every day), crypto probably isn’t going anywhere.

No account yet? Register

cryptocurrency

The 3 big benefits of bitcoin & crypto

You can barely get through a convo these days without mentioning Bitcoin or cryptocurrency. Onomy is breaking down what exactly cryptocurrency is and what crypto means in this video. New videos on crypto uploaded every week!

There’s a LOT of hype around Bitcoin & Crypto… but why? It goes beyond the “getting rich quick” scheme that so many have fallen into. This is REAL tech that can have some pretty big implications for the future. 

 

To understand why these have become so popular in the past few years, we’re breaking down some of the main benefits (& a few downfalls) in this lesson.

 

Benefit 1: Bitcoin is “decentralized”

 

We dive into this more in our “what is Bitcoin?” lesson, but it’s one of the biggest reasons why people love bitcoin (and other cryptocurrencies). Because traditional money is controlled by banks and governments – which makes it a “centralized” currency. But Bitcoin is not controlled or regulated by any single entity like a bank – which makes it a “decentralized” currency. Having no banks in control can make sending and receiving money cheaper, faster, easier & more secure.

 

BUT keep this in mind: since Bitcoin & other cryptocurrencies aren’t institutionally or legislatively backed; it can make them unpredictable, volatile, and risky. 

 

Benefit 2: You can’t counterfeit a Bitcoin or cryptocurrency

 

Paper currencies, credit cards, and checks can be counterfeit. Ever checked your credit card statement to see thousands of dollars charged to a random Home Depot in Kansas City? Oh, just me? Well it sucks when that happens.

 

One cool thing about Bitcoin is that it solves what’s called the “Double Spend Problem” – meaning fake Bitcoins are impossible to create. Actually, counterfeiting any cryptocurrency is impossible!

 

Here’s how the Double Spend Problem works: think of digital money like a computer file. Technically it would be easy for somebody to just “counterfeit” it by copy and pasting the file. Before Bitcoin, the solution was for banks to keep track of the money in everybody’s accounts, so that nobody could spend money twice.

 

The way Bitcoin solves the problem is slightly different. Bitcoin makes all accounts and transactions public – but doesn’t show private details like your name. Since account balances are public and computers all over the world are constantly checking and verifying these accounts, it would be clear if someone tried to use the same money twice.

 

HOWEVER, we have another thing to be aware of here. Since cryptocurrencies like Bitcoin don’t have names attached to them, meaning that users are identified by their public key address rather than their name and social security, cryptocurrencies can be an easy tool for money laundering, tax evasion, and illegal trade in drugs and weapons. Yeah… not cool.  Clearly a downside at this stage since crypto is not regulated (and that’s kind of the whole point).

 

Benefit 3: It’s SECURE!

 

There are HUNDREDS of BILLIONS of dollars stored in Bitcoin, so it needs to be extremely secure. But how exactly does Bitcoin ensure security? Well, it uses something called cryptography (a fancy word for super strong computer code) to securely send payments.

 

That’s why Bitcoin is called a cryptocurrency. The code it takes to send money is so strong & secure that hacking it is virtually impossible – in fact, it has never been hacked!

 

Ok so what exactly is “cryptography”?

 

It’s pretty complex for those of us who aren’t math or computer science wizzes, but basically, cryptography is a technology that protects information through very complex math functions. 

 

Bitcoin uses strong cryptography to protect your account and let you securely send money. It’s designed so that nobody can hack your account, and it prevents the wrong person from receiving your money! 

 

All in all, crypto is pretty revolutionary when you think about all of the use cases & problems it can solve. That’s why a lot of people are so excited about it. But, despite its revolutionary-ness, it’s so new and still largely unregulated, which can pose a lot of risks. 

 

So regardless of what happens and where this technology takes us (it is continuing to evolve every day), crypto probably isn’t going anywhere.

lessons in this course

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Share on twitter
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