Despite all the mainstream media attention surrounding Bitcoin, it remains a confusing concept for many people.
As soon as words like "cryptocurrency", "decentralized" and "peer-to-peer" start to get thrown around, you can see people's eyes start to glaze over.
The thing is, once you wrap your head around Bitcoin, you begin to realize that it's not that complicated after all – and, it's really, really cool.
Here's a great explanation from the folks at Vox:
Bitcoin is a new kind of global payment network. Like MasterCard or Paypal, it allows money to be transmitted electronically. But Bitcoin is different from these conventional payment networks in two important ways.
First, the Bitcoin network is fully decentralized. The MasterCard network is owned and operated by MasterCard Inc. But there is no Bitcoin Inc. Instead, thousands of computers around the world process Bitcoin transactions in a peer-to-peer fashion.
Second, MasterCard and PayPal payments are based on conventional currencies such as the US dollar. In contrast, the Bitcoin network has its own unit of value, which is called the bitcoin. The value of one bitcoin fluctuates against other currencies in the same way the euro’s value fluctuates against the dollar. In April 2014, one bitcoin is worth around $400, and all bitcoins in existence are worth around $5 billion.
Still have questions?
To help you further understand just exactly what Bitcoin is, we've curated the best videos on the web that explain Bitcoin basics.
12 Videos to Help You Understand Bitcoin
These videos range in length but all offer explanations of what Bitcoin is and how it works. You'll be a Bitcoin expert by the time you're done!
1. We Use Coins
This first video is from We Use Coins and was one of the first videos to appear online explaiinng what Bitcoin is all about. This video is a short animated introduction to Bitcoin, made possible with donations from the Bitcoin community.
2. Khan Academy
This video from the Khan Academy features Zulfikar Ramzan, a world-leading expert in computer security and cryptography who is currently the Chief Scientist at Sourcefire.
3. Bitcoin For Beginners: How to Mine Bitcoin
In this video, Jay Busch offers an introduction to Bitcoin and Bitcoin mining.
4. What Is Bitcoin and How Does It Work?
Popular social media news site Mashable takes a stab at explaining Bitcoin in plain language.
5. Bitcoin: All the Facts
In this video from Daily Reckoning video, you get a brief tutorial about the red-hot digital currency and learn why some are heralding it as the future of currency, free from central bank manipulation, inflation and government capital controls.
6. Bitcoin Mining Explained
One of the most confusing concepts within Bitcoin on the whole, is the process of mining. This video from Crypto Currency explains everything in layman's terms.
7. What is Bitcoin? How to Use It?
This video is a short animated introduction to Bitcoin, made possible with donations from the Bitcoin community.
8. What is Bitcoin Mining?
Have you ever wondered how Bitcoin is generated? This short video is an animated introduction to Bitcoin Mining.
9. CNN: What is Bitcoin?
CNN Money's Zain Asher explains the concept of Bitcoin and if it's the currency of our future.
10. Bitcoin for Dummies
A simple non technical explanation about the concept of Bitcoin for beginners.
11. What is Bitcoin? And Why Should I Care?
Jeremy Allaire (Founder, CEO, and Chairman of Circle Internet Financial) provides an overview of the problems with legacy payment systems, the core innovations of bitcoin and digital currencies, and current and emerging applications of the bitcoin protocol at the MIT Bitcoin Club.
12. What is Bitcoin and How Does it Work?
Funk-e Studios takes a look at what Bitcoin is and how it works in collaboration with Bitonic.
