What is Bitcoin?
Bitcoin is an online currency invented in 2009 by an anonymous creator under the name Satoshi Nakamoto. This cryptocurrency, or electronic currency, has baffled the majority of the population since it first came into the limelight. Its value has boomed from its original creation, when it was worth a few cents, to now where each virtual coin is currently worth around $9,300 (though there was a fall earlier this year). They are stored in each individual’s “digital wallet”, either in the cloud or on a personal computer. For payments, the coins are transferred through the use of apps or computers, and the currency uses a decentralised network of computers to store these balances and transactions, thus bypassing banks as the usual middleman.
Bitcoins are acquired either through companies that exchange local currency for bitcoins, or, alternatively, there is a process called bitcoin “mining”. Essentially, mining is when people compete by spending computing power to confirm transactions by solving complex mathematical puzzles. However, there is an incentive for users to mine: when a solution is found, that miner is rewarded a designated number of bitcoins.
For staters, Bitcoin is incredibly secure, preventing fraudulent and/or forced transactions, and at the same time, identity theft is also strongly protected against. It allows for anonymity, with the names of buyers and sellers kept secret so that transactions cannot be traced back. In addition, unlike credit cards, a fee does not need to be paid for receiving Bitcoins, and when spending, the user can choose how much of a fee pay for faster confirmation of the transactions, but regardless, the fees are not impacted by the amount transferred.
Furthermore, Bitcoins can be transferred at any time and place without the usual limitations like bank holidays, borders, or bureaucracies. It is even easier to make payments with Bitcoin than with credit or debit cards as the only thing necessary is a wallet application downloaded on a smartphone or computer.
Ultimately, with bitcoin as the first major decentralized cryptocurrency based on blockchain it will be continually watched closely as no one can predict exactly what will come. However, based on analysts predictions, it is expected to reach a substantial total value of over $1.2 trillion by the end of 2018.