How Bitcoin works: at last, an explanation

Jan 11, 2018 | Currencies

One day a merchant and his apprentice came to a remote village and offered to buy as many rats as the villagers could find for £100 each. The villagers thought he was mad but knew when they were on to a good thing and caught plenty of rats for him. The merchant came back and said he’d now pay £200 per rat. The news spread and everyone became a ratcatcher. When the price went up to £500, rat-catching-fever gripped the village. The merchant said he’d be back in a couple of weeks, when the price could be £1,000.

Next day his apprentice returned and offered the villagers a deal. He’d sell them rats for £700 so they could really cash in when the price hit £1,000. The villagers begged, stole and borrowed to raise cash to buy back for £700 the rats they’d already caught and sold.

They never saw the merchant or his apprentice again.

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