Bitcoin – A Beginners Guide
The term Bitcoin has become something of a cyber myth. The cryptocurrency, being showcased in movies, books, and popular culture, always intends to pay for some form of sinister work from a shady computer obsessed hacker. The truth is that Bitcoin is more of a cultural movement followed by its economic faithful than an actual evil currency dedicated to malicious transactions. Now one of the hottest commodities, hunted, worked for and mined online. One Bitcoin is worth a fortune, but it is still a hard-to-understand form of currency.
What is Cryptocurrency?
Cryptocurrency or Crypto is digital money designed to work as a possible exchange medium where the money’s ownership is stored in a digital ledger in a computerised database that uses important cryptography guarantee transactions. It usually does not exist in physical form and is not issued by a central authority.
What is Bitcoin?
Bitcoin is a cryptocurrency that exists entirely online. Simply stated, it’s online cash; you can use it to buy products or services. Bitcoin is controversial since it has yet to be accepted in the mainstream and is commonly used for in-store purchases. Many countries still have yet to receive the legitimacy of the cryptocurrency. Other countries like Venezuela have already launched their version of Crypto, in that case, called The Petro.
Bitcoin was created in 2008 by an anonymous individual or group that used the name Satoshi Nakamoto and hit the markets in 2009. It was released as open-source software with the idea of a decentralised digital currency without a central bank or a representative that can act as an intermediary. The transactions are recorded in a public ledger called a blockchain.
The first recorded bitcoin transaction was conducted by Hal Finney and received ten bitcoins from Nakamoto. Since then, an estimated one million bitcoins were produced by Nakamoto before disappearing in 2010; the repository was handed over to Gavin Andersen, who established the Bitcoin Foundation.
How are Bitcoins Found?
The most common form of obtaining a bitcoin is payment for a product or service, much like any traditional transaction. For those starting into the world, they begin with mining for the coin. The idea does cause some confusion, but not to worry, there are no picks or shovels required here. The term mining comes from the constant computer power dedicated to the search, and much like traditional writing mining, it all about striking it rich. Mining is record-keeping done through processing power.
It keeps the blockchain and repeatedly broadcasts transactions onto a block, which then reveals to the established network and nodes. It gets even more complicated as the exploration becomes repetitive, but whose end goal is to find the new block will allow the miner a reward, which usually six new coins. Then the process repeats itself. There are then added to the cryptocurrency wallet. Where it is then available for use to the person.
Why the Controversy?
The main concern that looms over the most popular cryptocurrency is the fact that these virtual coins can be used for illegal transactions with no real way to monitor the reason for the transaction. So it is not unheard of it being used for drugs, weapons, and other such illegal transactions.
The bitcoin software was released in 2009; with the sudden collapse of the American banking system, the cryptocurrency phenomenon took off. The failure of the traditional financial institutions and the rapid growth of the virtual currency became big news skyrocketing its values.
The year 2011 registered a bitcoin’s starting price at 0.30 per bitcoin, raising to 5.27 by 2012. By the end of 2012, the price had grown to 13.30 for the year. It suffered a crash of almost 50% to 3.80 for about 16 days to bounce back even more robust to 16.41. Like most commodities, it rises and falls depending on demand and speculation. By 2017 the bitcoin price had reached 2,748, and by 2019 had reached an all-time high of 19,783 per bitcoin. It is noted that this is a very brief summary of the rollercoaster ride that has been the value of the bitcoin; it has lost weight over the years. When China banned its trade use, bitcoin took a significant loss, but it climbed back to its highest market value.
The Future of Bitcoin
Bitcoin obtains its value by the demand for it, how much it costs to make one, the reward for finding a block, the competition from other cryptocurrencies, the money it can be traded in, and the regulations that oversee the sale of the currency. All these things are taken into account when pricing the value. At the same time, many have speculated that cryptocurrencies are nothing more than an overly inflated bubble bound to burst. It has shown resilience and staying power.
Bitcoin has grown much faster than its competitors and has shown the most strength, thanks to its legions of users and miners. So as long as there are those willing to keep investing the time and the money to enjoy the virtual currency’s freedom, there will be growth.
Experts have predicted that by the end of the year 2020 will break the twenty thousand dollars mark and by 2030 have increased its value by over %400 and reach a value of 400 thousand.
Is it worth investing in Bitcoin?
There is nothing as a sure thing in life, and even though bitcoin feels like a sure thing, the foundation of the currency depends significantly on those willing to put their faith in it. The person should consider the initial investment of equipment and the time it takes to see a return. Experts seem to agree that it is a safe investment and that bitcoin followers are here to stay. So, take that all into account when making a final choice.
Written by The Original PC Doctor on 5/12/2020.