Bitcoin is a currency that exists on the internet that is created on the internet and serves the needs of the internet generation. It does not belong to any government; it is not controlled by any bank. Bitcoin is not a company or product or a service. It's an internet protocol a method of communication just like email. Emails do not belong to anyone, it exists on the internet it's a shared common, public good. Bitcoin is a digital currency and payment system that is a shared good, it is controlled collectively by the bitcoin users. Each user is his or her own bank.
You might think that a currency that does not belong to a nation seems weird and that it cant work.
Bitcoin is more like an exit opportunity, national currencies and banks are geopolitical organizations and the people pay the price. With that said it is important to realize that bitcoin is not indented too, designed to or intended to (at least I do not think anybody that is in bitcoin thinks this will happen), to replace national currency.
It is intended to break monopolies it gives people the option to have an alternative.
Think of bitcoin this way, think about exchanging money as a tourist. If you living in South Africa and you want to visit France, you go to France and you change some of your Rands to euros. If you travel to France often then maybe you keep some of those euros so that you can have them for next time. Then later you start visiting France often, maybe starting to earn in euros directly so you don’t exchange as much anymore.
Well, I visit the internet as a tourist. So, on the internet, I exchange my rands into Bitcoin, because that is the currency I can use to do online shopping on the internet across the world very effectively, very securely and very fast.
The currency of the internet is Bitcoin now imagine after a while I “move” to the internet and I started earning on the internet at that stage I am earning in bitcoin, bitcoin is my currency and when I go to the mall I am a tourist in South Africa and so I transfer my bitcoin for rands or euros if I go to France.
Think of the internet as a borderless country where some of us are permanent residents. Then you will start to understand how bitcoin can be a currency of choice another option.
I wrote a full article here on How to Buy bitcoin with Luno.
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