Bitcoin is a digital currency that is created through “mining” and recently reached its highest value at more than $3,500 per bitcoin. But what is it, exactly?
Wences Casares, founder of Bitcoin wallet startup Xapo, joined Tuesday’s “The Glenn Beck Radio Program” to explain what makes Bitcoin unique and why the average person doesn’t need to struggle with understanding it.
The important thing to remember is that you can use and understand Bitcoin without truly understanding all of its mechanics. Casares compared Bitcoin to the internet, something that many people use without fully comprehending how the technology works. He also listed three things “that did not exist before Bitcoin existed” and make the digital currency unique.
First of all, Bitcoin is not under the jurisdiction of any one country or military force.
“Nobody can control it,” Casares said. “Not me, not any group of people, not any company, not any country, not any army.”
Unlike regular money, Bitcoin was developed to reach a finite amount; there will never be more than 21 million Bitcoin in the world. The third quality that makes Bitcoin unique is that it gives you the ability to send currency instantly to anyone in the world. “No one can keep you from acquiring some Bitcoin,” Casares explained.
ANTHONY WALLACE/AFP/Getty Images
This is a rush transcript and may contain errors.
GLENN: So tell me how you believe people will say, “Don’t take my bitcoin, but you can take my internet.” What do you mean by that?
WENCES: Understanding bitcoin — bitcoin is simpler than the internet at a technical level, if you will. And I think when people don’t understand it, it’s not their fault, but our fault. The people explaining it. We make it more complicated than it needs to be, because it makes us sound more intelligent, I guess, or something.
STU: We try that a lot too. It doesn’t work for us.
WENCES: You think about it, most people feel confident and comfortable about their understanding of the internet. Right? Without really understanding how —
GLENN: How it works.
WENCES: — it really works, technically. It’s not necessary to understand it. Or even a credit card. Right? Most people feel very confident with a credit card, understanding how it works.
But if you ask them, what happens when you swipe the card, where does that information go? Does it go to your bank or to the merchant’s bank? At what point does it get approved? Who says it, right?
We don’t really need to understand a lot of those details, to understand how credit cards work and what they can and cannot do for us. The same thing with internet and the same thing for bitcoin.
And the things that do matter and that we do need to understand of bitcoin are quite simple, really. And it’s three, three things that make bitcoin unique, that we’re not — that did not exist before bitcoin existed, that bitcoin brought to the world.
Number one and most important: It’s that it’s not controlled by anyone. And it is not possible to control it. And it’s a key feature. Without it, it would be irrelevant. It has a lot of very positive consequences. It has some potentially negative consequences. But it’s what makes bitcoin bitcoin. Nobody can control it. Not me. Not any group of people. Not any company. Not any country. Not any army. Nobody can control it. That’s number one.
Number two, is there will never be more than 21 million bitcoin. It’s a finite number. And that cannot be changed.
And number three, whenever you have some bitcoin, you are free to send it to anyone you want, anywhere in the world, pretty much in real time, and pretty much for a very, very low cost. That last quality, it’s quite revolutionary. And I call — a lot of people call it the uncensorability of bitcoin.
No one can keep you from acquiring some bitcoin. It’s impossible to do. No one can keep you from keeping those bitcoin, and no one can keep you from sending those bitcoin to whomever you want.
When you put those three qualities together, that’s really all you need to understand about bitcoin. How that gets accomplished, it’s complicated and technical, but not really needed to understand. Just like you don’t need to understand how the internet manages to deliver all of this movies and stuff that it does.
GLENN: You grew up in Argentina —
GLENN: — when the economy collapsed. When the money collapsed.
GLENN: And I am imagining that that drives you quite a bit when it comes to bitcoin.
WENCES: I think so, yes. I would imagine so.