What is Bitcoin and what are CryptoCurrencies – In Telugu | బిట్ కాయిన్ అంటే ఏంటి?


Welcome everyone, my name is Ramakanth. In the last three videos we learnt how money got started, how it changed and how governments and banks destroyed value of money. Just in case you didn’t watch those videos, please watch. I shared the links of those videos in the below description. Before getting to the topic, as usual small disclaimer. Whatever I am discussing in these videos is not a financial advice all these are my own views coming out of my limited knowledge whatever I have. So, based on these videos do not take any investment decisions. I am not responsible for your profits and losses. ok FInally we are entering in to the topic that you have been waiting for What is Bitcoin and what are CryptoCurrencies? As we have seen in our last few videos banks and governments were increasing money supply as per their wish and because of which prices of goods and services were rising. You might say, In this way, when value of money was getting destroyed, weren’t anyone in the world concerned with this phenomenon? What you thought is right. Some scientists when they realized it, they thought money creation shouldn’t be in the hands of the government. In 1980s and 1990s when usage of internet was increasing, those scientists thought money can be converted to digital format with scarcity and privacy and they started trying to invent it. Like this in 1992 some scientists got together and formed in to a group and gave their group a funny name called “CypherPunks”. “CypherPunks” means a group of anonymous worthless people. haha. Do not get cheated by looking at the group name. The scientists in CypherPunks group were experts in numerous subjects such as Computer programming, Cryptography, Mathematics, Statistics, Law. Especially in Cryptography and Computer programming. These CypherPunks used to have a mailing list. Think of it like a group email or a Whatsapp group. If someone wanted to discuss a new topic or a subject, they used to post it in this mailing list and discuss through emails or online forums. 4 members from this CypherPunks group tried to create digital money that would have scarcity and privacy. In those people, the first noteworthy person is, David Chaum. This guy invented a digital money called “e-cash”. It got started in 1990 and around 1995 it got quite a bit of adoption in mainstream and even banks started using it But because of court cases and and some other legal issues his company got closed down. Second noteworthy person is Adam Back. This person used a system called “Proof of work” and invented a digital money called “hashcash”. Even though this system was used to reduce spam in some places, it didn’t receive wide adoption in mainstream. Third noteworthy person is Wei Dai. This guy in 1998 created “b-money”, which is the first of its kind with a concept called “Decentralized CryptoCurrency”. Which means, he created a software that uses Cryptography to create money, that is not in the control of government or a central authority, But because he couldn’t solve some technical problems even this digital currency didn’t gain any adoption in mainstream. And the fourth noteworthy person is Nick Szabo. This guy invented a concept called “bitgold” in 1998. Which is a digital currency with properties of gold such as scarcity and without being controlled by governments. But he couldn’t implement it practically. Like this while some people tried different concepts, sometimes because of the technical problems, sometimes because governments didn’t like it, cases were filed in courts and stopped those digital currencies from becoming mainstream. So one thing that you have to notice here is that, all the currencies that were tried till then had a central point of failure. Which means, because one person or a company was behind those currencies, by filing cases on them or by blocking their computer servers, or in some other way, these digital currency projects were easily stopped by governments. When things were happening like this, on 31st October 2008, to this CypherPunks mailing list, some anonymous person with a pseudonym “Satoshi Nakamoto” took some important concepts from all the scientists that we talked earlier, added his own concepts and sent a document with headline “Bitcoin: A peer to peer electronic cash system” to all members in the CypherPunks mailing list. This kind of a document is known as “Whitepaper”. In a whitepaper, generally they explain how a technology can be implemented. Which means, for example, when you watch cooking videos in Youtube, a chef explains to you right, how an item can be prepared. In the same way, in a whitepaper they explain how a technology can be implemented. One great thing here is that Satoshi Nakamoto, like others, didn’t write theory first and then sit to implement it. But in an opposite way, he already implemented a system called Bitcoin, meaning he wrote the software first and only when he was confident enough that it was working he wrote the whitepaper. Look here This is the original whitepaper written by Satoshi Nakamoto. I will also share the link to this document in the description below. Please read it if possible. One more very very interesting thing here is that.. No one knows who is “Satoshi Nakamoto”. Whether he is one person, or a group of persons or a company. Even though lot of people tried to find it out, no one could. It still remains a mystery. That whitepaper was read by some CypherPunks who were interested in it and gave feedback regarding any loopholes in the system. He then used to correct them in the software. He did that for two months and then on 3rd January 2009, he ran Bitcoin software live for the first time. That is how for the first time in the world, not just theoretically but practically working CryptoCurrency called “bitcoin” was created. CryptoCurrency means nothing but digital money that is created using Cryptography. So we can say that “bitcoin” is the first CryptoCurrency. One special thing there is that, Bitcoin is not just a cryptocurrency, it is a Protocol and a Network also. Protocol means “set of rules” When you send an email, how do you think it goes from one email account to another? Using a protocol called “SMTP”. SMTP means “Simple Mail Transfer Protocol”. Which means in that software, rules are written as to how a message can be sent from one email account to another. In the same way, in this Bitcoin protocol, rules are written on how to send digital money from one person to another without any banks in the middle. Plus all these written rules were published as Open Source software. Which means anybody can copy that software, use it and can improve it also. That is why Bitcoin is called “Open Source, Peer-to-Peer, Decentralized Protocol”. Bitcoin is also a “Network” Why do we call “Facebook” as a social media network? Because all the people who are using Facebook software are members of that network and they can share their photos and posts with other members. In the same way people who use Bitcoin software or apps related to Bitcoin are members of Bitcoin network. and they can share their money with other members in the network. That means, Without any need of Banks in the middle, to send money from one person to another directly, all the rules were written as a software and it was named as “Bitcoin”. And the currency that gets generated when that software is run is also named as “bitcoin”. So Bitcoin is both a protocol and a currency. When you write Bitcoin with capital “B” it refers to Bitcoin protocol/Network and when you write bitcoin with small “b” it refers to bitcoin currency. But of course no one follows it though. 99% of the people think of Bitcoin as only a CryptoCurrency. Most of them don’t know that it is also a Protocol and a Network. So, now you know more than 99% of the people out there. haha. So, we are considering this Bitcoin as a CryptoCurrency but as we discussed in the previous video about monetary history, does Bitcoin have all the properties of money to be considered as a currency? Let’s see As we have seen in the previous videos, any money should have these six properties. First one Scarcity. We know that Gold has scarcity. But Fiat Currencies do not have any scarcity right. Government can print as much money as they want. But Bitcoin has scarcity. because only 21 million bitcoins which means 2 crores 10 lakhs of bitcoins can only be generated. More than that cannot be generated. Second, Divisibility As Gold and Fiat currencies can be divided in to smaller quantities, in the same way Bitcoin can also be divided. 1 bitcoin can be divided in to 100 million Satoshis. Third property, Fungibility That means ability to use one coin in place of another. As we can replace one gold coin with another and one currency with another in the same way, Bitcoins can also be replaced with one another. But one important point here is that Gold and Fiat Currencies can be counterfeited. But counterfeiting Bitcoin is impossible. Fourth property, Durability/Storability. As we can store gold and fiat currencies, in the same way, we can easily store Bitcoin for however long we want. Fifth property, Acceptability. Even though not as much as Gold and Fiat, Bitcoin acceptance is growing day by day. Already multi-national companies like Microsoft, Dell, Expedia, Overstock etc. are accepting Bitcoin as a payment. So, there is lot of chance that Bitcoin could be accepted as global money. And last Sixth property, Portability. It is pretty tough to transport Gold and Fiat currencies in a large volume. But because Bitcoin is digital money, it can be sent to anywhere from one corner of the world to the other in just 10min. Ok so now you have seen how along with all the properties that Gold, which was successfully used as money for thousands of years, has Bitcoin also has all those properties along with the flexibility to be sent from one corner of the world to the other easily in a few minutes. Ok Bitcoin has all the properties that money should have, but as we discussed in previous videos about problems caused by fiat currencies, will bitcoin be able to solve any of those? Let’s see. Among the major problems we discussed, the first one is “Fractional Reserve Banking” Because bitcoin creation is done through software, no bank or central authority can control it or increase its supply. So, it is not possible to do Fractional Reserve Banking by directly using bitcoin. Second problem, Currency Debasement. Because Bitcoin is not physical, it is not possible to debase it by mixing other metals like gold or by printing counterfeit currency like fiat. Creating counterfeit Bitcoin is almost impossible. Third problem, Money confiscation by government You can store bitcoin in your computer, or in your mobile, or on a paper or simply you can remember it in your brain. So, it is impossible for government to confiscate your bitcoin. Fourth one is Inflation. That means increase in prices. Because bitcoin supply is limited, i.e., because only 21 million bitcoins will be generated, in the long term, price of Bitcoin will mostly increase and the probability of it decreasing is very low. So, When the value of Bitcoin increases, prices of goods and services in terms of it decrease right. That is why Bitcoin is known as “Deflationary Currency”. Last but not least, “Banks cheating people and controlling their money”. Bitcoin is your money. You need not deposit it in any bank. You can safely store it with you. If you want to lend you can lend it to whomever you like There is no need of banks at all. Having to wait outside a bank for hours together just to withdraw your own money, banker coming to the bank slowly at 10am drinking a coffee and showing off his authority as if he is giving his own money, not having money in ATMs, having to take permission from banker to send your own money to your own people, having to go through the restrictions related to withdrawals and transfers, all sort of this nonsense won’t be there with bitcoin. Even if it is in the midnight, YOU CAN USE YOUR money, however you want to. You don’t need anyone’s permission and no one can restrict your transactions. Bitcoin networks works 24 hours a day, 7 days a week without any break. In the last ten years, it didn’t stop even for a minute. That is why, as a bitcoiner YOU ARE YOUR OWN BANK! So to put it in one sentence, Bitcoin is the world’s first Censorship Resistant, Permission-less, Border-less, Peer-to-Peer, Decentralized CryptoCurrency! Anyway, now you know bitcoin history, what is bitcoin and how it is better when compared to fiat currencies. But before knowing how bitcoin actually works, we have to discuss another small topic. That is… Hmm, I won’t tell you. Let’s play a small game. There is some message hidden behind the code that is displaying on the screen. Let’s see if you can find it out! The first person who solves it and posts the solution in the comments section below will be awarded 30$ worth Bitcoin! Promise! But let me tell you, solving this puzzle is pretty hard. So, I will give you a couple of clues. First clue: The message that is hidden behind the code, is a frequently used sentence/phrase in bitcoin community And the second clue is: SHA256 Now try it out. Bye!

9 thoughts on “What is Bitcoin and what are CryptoCurrencies – In Telugu | బిట్ కాయిన్ అంటే ఏంటి?”

  1. Present e currency lo invest cheste baguntundi 2019 lo better predictions evi, India lo crypto invest safe or not? Oka video cheyandi bro

Leave a Reply

Your email address will not be published. Required fields are marked *