 Now Bitcoin all that it really wants to be is a currency that is digital and Decentralized, okay, so you know what digital is. I don't need to explain that. What do they mean by decentralized? Bitcoin is not supposed to be run by any one person or company or group or anything else Okay, now that is actually a sort of difficult thing if you want a digital currency. Let's let's think about it So let's say that you had a digital currency that's just files on your computer Well, it's easy to just copy a file and send it to multiple people infinite money, right? That obviously doesn't work So if let's say PayPal wanted to create a digital currency that would also be easy Because everyone might have an account But if you want to ask someone how much money do I have? You know was this transaction this person sent me was that legitimate? You can just ask PayPal, right? Because they keep all the transactions. They are the arbiter of truth if they're managing the currency But how does Bitcoin? Manage to be digital, but still decentralized that is not having something like PayPal or some other company Controlling the whole game Here's how it works. It's it's blockchain technology, right? Well, actually, it's a little bit more than that So firstly a blockchain what that is it's actually just a list of all the Transactions ever in Bitcoin, okay, or in whatever cryptocurrency you're talking about It's called a blockchain because technically it's not just a list of transactions It's actually a list of transaction in Transactions in chunks and blocks usually of around 10 minutes or so of time that all these transactions are You know happen during And they are related those are called blocks and they're related to the blocks next to them that happened before and after By cryptographic hashes, okay, and that's called a chain, right a blockchain now This by itself doesn't really mean anything. Okay, so what now here's the interesting thing the Computers and the blockchain network in the Bitcoin network. They are made to do two things, right first They store all of the transactions that people put on to the Bitcoin network If you send someone money if someone sends money to you they store that in the blockchain Okay, that's number one number two. This is gonna sound weird, but this is the solution actually You make all of these computers perform extremely complex solve complete Extremely complex cryptographic puzzles. Why do you make them do that? Well? Now these puzzles they're not I don't mean in the sense like someone can look at the answer sheet and see if they're right But they're they're cryptographic puzzles that can be easily checked But they're you require lots of real live processing power to actually solve now. Why is this important? well, what ultimately determines What the true blockchain is is what has the most proof of work? That is where has the network solved the most cryptographic puzzles? Let me give you an example of this you can right now. You can download the Bitcoin blockchain Okay, on your own a computer. It's big, but you can download it. You can actually make changes to it Let's say you make a change that says I all in millions of Bitcoin. I'm gonna have go to my wallet, right? You could do that Okay, you go go in there and modify it And then you could host a node and try to get other people to accept your version of the blockchain that you've falsified, right? But how the Bitcoin network is set up is that the only blockchain that matters is the one with the most proof of work The one that has solved the most cryptographic puzzles all the other ones. They they don't exist. They don't matter Okay, this means if you wanted someone to actually pay attention to your blockchain your version of the blockchain You would have to perform real proof of work. You would have to have more processing power than everyone else on the planet Okay, so that would basically be impossible So Bitcoin because of this you can actually trust the blockchain that's out there that this is the real Transactions and that is not it's not something that's being managed by one party. It's something that I mean you could even manage you can download it yourself and You know that something you don't have to trust no one is going to manipulate. You don't need one party running the show Okay, so that's the basic Well, I should say what you know, why would anyone even do these cryptographic puzzles, right? Why would you put your computer into the network to participate in this? It's gonna waste your electricity well That's why it's called Bitcoin mining because how the Bitcoin network works is that if you solve You know if you're part of a party that solves these cryptographic puzzles you are rewarded an amount of Bitcoin for doing so So the network always progresses it always has more and more proof of work Meaning it's harder and harder for someone to come up with the processing power to falsify falsify the blockchain Now other cryptocurrencies Take this core idea of the blockchain and they'll add other stuff onto it So the second most popular cryptocurrency right now is what's called Ethereum. Ethereum became a real big thing in the last Cryptocurrency run. Here's what Ethereum does. Okay to add some stuff on well We have this big network of computers doing stuff, you know these cryptographic puzzles Let's have that also do something else. Let's have them You know run scripts, you know, let's say we have developers on the network that can You know write programs write, you know things that happen on the blockchain, right? You can interact with the blockchain Well, Ethereum what it adds is this additional scripting ability. You can you know have your own kind of Ethereum token I should say that has its own special functions and does this when that happens you can script the Ethereum blockchain and The people who put their computers into this Ethereum network They're actually rewarded ether For letting their computers be used for this purpose, right? So that's how Ethereum works Some I think technically that the currency itself is just called ether. Sometimes people call it Ethereum Even though I think the word Ethereum is really supposed to be reserved for the network as a whole and there are actually a lot of tokens based Based on Ethereum For example the basic attention token those of you who use Brave You're using one of these Ethereum tokens It's it's something that is scripted into the the browser functionality in Brave Or Chainlink is another popular token nowadays. It's sort of taking off You know it its goal is actually to integrate the scripting on the blockchain With scripting on the internet as a whole that is things on the blockchain can access things on the internet and vice versa That's the idea of Chainlink So this this is the idea of a blockchain though It's it's a computer network that originally it seems does something that's totally Useless in itself solves a bunch of cryptographic puzzles for nothing But because you get proof of work out of that you can actually have a decentralized currency and not just the decentralized currency But something that does Lots of other stuff aside from that. Okay, you can start scripting it. Okay. Anyway, that's Basics, I'll talk a little bit more about cryptocurrencies in another video, but that should help you understand