You've probably heard about Bitcoin before. You may not know what it is - or how it works. But you have heard people in your circle of conversations talk about Bitcoin.

Bitcoin is this decade of words in the financial sector. And with full justification. At least, it means Mads Eberhardt from BetterCoins.dk , one of Denmark's largest retailers of Bitcoin and Ethereum, where you can buy both Bitcoins and Ethereum.

Mads explains that before you can understand why Bitcoin has come to stay, you need to understand how our current financial setup works.

It would seem to be difficult to understand our current financial setup than to understand Bitcoin as this involves the influence of many different authorities, banks, European unions and much more, where Bitcoin is just the technology that one should understand as it is this which causes the currency to work.

If you want to go into depth with how our current financial setup works, then we will not finish just as soon as possible. Therefore, we have chosen in consultation with Mads to explain simply the most basic.

To start, we must explain how the money creation takes place. Many believe that it is Danmarks Nationalbank that is printing Danish money. That's partly, too. But it is only 5% of the Danish kroner that Danmarks Nationalbank presses. The rest is being pushed by the banks.

Why do you ask?

This is because Danmarks Nationalbank pushes the cash money in which the bank pushes the digital money. Or rather, the banks create the digital money as red and green numbers on a screen, respectively. They make this money through lending.

That is, every time you borrow $ 100,000 from the bank, then this money will be created, every penny - that's why not old money, so to speak, but brand new money.

It sounds strange, but unfortunately now it is.

This results in far more financial crises, bubbles and financial collapse, as banks make the most money in good times, for which they stop in bad times. This makes the economy flourish a lot in good times when it stands completely silent in bad times.

That's the only problem with our current financial setup. In addition, there are several problems, including. that it is expensive to send money across national borders than it should be that the money network is centralized and much more.

Bitcoin (and other crypto currencies) fixes this. Here we are dealing with open-source and decentralized networks, which no one owns or can decide on. Neither the state nor the banks, as in normal currencies.

You can transfer money from Denmark to China in a matter of minutes - without significant charges - and you can follow the transaction on Bitcoins Blockchain, all of which are accessible to everyone. You can have them standing on your digital wallet (wallet), where no one theoretically can touch them. And then we have to deal with a currency where there is a fixed interval for when new Bitcoins are released in circulation, how many are maximum in circulation. This ensures that no one can create more Bitcoins than what is stated in the source code, such as. can with normal currencies.