What is bitcoin and who created it ?
Bitcoin is a digital currency and a payment system invented by an unknown group or person by the name Satoshi Nakamoto , who published the invention in 2008 and released it as open source software in 2009. It is the first decentralized digital currency, meaning the system works without a single administrator or central bank, you can use them in every country, your account cannot be frozen, and there are no prerequisites or limits .
Bitcoins are transferred directly from person to person, also known as peer to peer. The cryptographic transactions are verified by a network of people and recorded in a public distributed ledger called the block chain . Note that once a payment is made it can’t be reversed, and if you lose your wallet, you lose your bitcoins.
What are Bitcoin Benefits ?
- Freedom in payment: This means it is possible to send and receive money around the world. There are no limitations when transferring the money. There is no central authority so you are in control of your money.
- Low Fees: As of right now there are no fees or extremely low fees within Bitcoin payments, for example transaction fees. Also digital currency exchanges help merchants to process transactions by changing bitcoins into fiat currency, and those fees are usually lower than PayPal and credit cards.
- Fewer Risks for Merchants: Since a Bitcoin transaction can’t be reversed, merchants are able to do business where crime rates and fraud rates are high without the merchant losing money from fraud.
- Security and Control: With Bitcoin one can make payments without their personal information being tied to the transaction. This will protect against identity thieves.
Problems with Bitcoin
- How do you extend mobile payments to third world countries ? Unless you have a broadband connection, you cannot “play” in the bitcoin game.
- Scalability: The size of the block chain. Bitcoin transactions are about 6–7 transactions per second, note visa and master cards are about 1000 transactions a second.
- If someone steals your bitcoin wallet or you lose it, there is no one to call to help. This makes the debate that bitcoin is a currency, and is thought of as a digital equivalent of a gold coin.
How to create bitcoins ?
You can create new bitcoins through a very competitive niche called bitcoin mining. Anyone with internet access and suitable hardware, for example Application Specific Integrated Circuit chips (ASIC)can mine bitcoins. The more miners the more secure the bitcoin network is, they are the ones who approve transactions.
Mining is the process of solving difficult math problems and miners are issued a certain number of bitcoins for it. By year 2140 there will be 21 million Bitcoins at which point no one will be able to create more. You can use the bitcoin calculator to see if the money to buy the hardware is worth it for you.
How to buy / sell bitcoins ?
You can buy bitcoins by using a bitcoin wallet. There are many different bitcoin wallets that you can use. This “wallet” can be on your phone/mobile device, desktop or online. Be sure to keep your wallet secure. You can get your wallet here.
How much is one bitcoin worth ?
Bitcoin is very volatile, the price of one bitcoin is liable to change rapidly and unpredictably. Earlier in January 2017 one bitcoin was equivalent to $985 USD. If you had invested $100 USD in 2010, you would be worth about $72 million USD today (12/21/2017).
As of 12/11/2017, one bitcoin is equal to $16,946.99 USD.
As of 12/21/2017 , one bitcoin is worth $16,754.99 USD.
As of 1/17/2018, one bitcoin is worth $10,327.66 USD.
As of 2/8/2018, one bitcoin is worth $8,425.02 USD.
As of 2/4/2021, one bitcoin is worth $37,046.60 USD.
How do I spend my bitcoin ?
The number of merchants and services accepting bitcoin is growing all around the world. You can use a search engine to find places that accept bitcoins. You can even find local places that accept bitcoins.
James Altucher thinks bitcoin will reach $1million USD by the year 2020. Bitcoin has been said to be the future of currency, billionaire Tim Draper says “In five years, if you try to use fiat currency, they will laugh at you. bitcoin and other cryptocurrencies will be so relevant… there will be no reason to have the fiat currencies”. The antivirus software creator John McAfee predicts that bitcoin will hit $500,000 within three years. Van-Petersen said that bitcoin could hit between $50,000 and $100,000 in 2018, he was wrong.
Some believe that the currency would be subject to severe deflation if it becomes widely used. A widely regarded economist named Stephen Roach said “ This is a dangerous speculative bubble by any shadow or stretch of the imagination”. The Saxo Bank analysts said that Bitcoin could hit $100,000 in 2018 but it didn’t, the bank’s also incorrectly predicted that Bitcoin would plunge to $1,000 before the year ends, but Bitcoin never reached that bottom price.
Bitcoin has many advantages/disadvantages and it will probably remain relevant as a currency. One of the biggest risk to bitcoin are other digital crypto currencies. So is bitcoin just a short fad, or the future of currency ? Well a few things are for sure, the price will remain volatile, and no one can predict the future.
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