All About Bitcoin - Currency Of The Future
Bitcoin is a relatively new type of currency that has exploded on the market, a cryptocurrency to be exact. When it was first created back in 2008, nobody thought that Bitcoin would be such a huge thing, but those people were all wrong. At this point in time, 1 single Bitcoin is worth over 3,310 Canadian Dollars, 2,451 US Dollars, or 1,907 British Pounds. The buying power of anybody who invested in Bitcoin a few years ago has skyrocketed.
Up until 2013, a single one of these things was completely worthless, not even worth a single penny, but all of that has changed. The value of Bitcoin has gone up drastically, and anyone who was smart enough to invest in it 4 or 5 years ago is now very wealthy. The value of it in the last 5 years has literally climbed over 2,500 times its original worth, which is of course very impressive.
Now that we know the worth of the Bitcoin, what exactly is it? How is it used? How does it work? People have been asking us a whole lot of questions about this relatively new type of money, so we are going to do our best to answer all of those questions. This is the Bitcoin Report 2017, so hold on to your hats ladies and gentleman.
The History Of Bitcoin – What Is It?
Bitcoin was first created and released in October of 2008 by an anonymous source known as “Satoshi Nakamoto”. Nobody actually knows who this Satoshi “person” is, as it may be a whole group of people. Up until today, who or what group of people actually created Bitcoin remains totally unknown. This Satashi Character actually stepped back in 2010 and handed the governance of Bitcoin over to Gavin Anderson, a man who sought to decentralize Bitcoin. This mean that Bitcoin is controlled by all Bitcoin users from around the world.
Bitcoin is not a real form of money in the sense that any one government prints it, not to mention that it does not exist in a physical form. It is a cryptocurrency and a digital system of payment, which means that it only exists online. Even though it is technically not a physical currency, it is becoming increasingly popular as a main form of online payment for goods and services. Bitcoin is actually a peer to peer payment system that does not use any kind of intermediary such as a broker, some kind of Western Union-like institution or any kind of bank. You can literally send Bitcoins to somebody to pay for a transaction.
How Are Bitcoins Valued?
One of the interesting parts about Bitcoin is that its value is based solely on how useful it is as a form of money based on mathematics. It is the supply and demand of Bitcoins that determines their value. Unlike Gold which relies on physical properties to determine its value, or currencies that rely on central authorities for their value, Bitcoin relies solely on this supply and demand process. The value is determined by the number of people using it and from the people willing to accept it as a form of payment.
Why Should You Use Bitcoin?
There are actually various advantages to using Bitcoin as a form of payment and currency.
- Freedom – They can be used anywhere and anytime. You can pay with or receive Bitcoins on bank holidays, weekends, and all other times. There are no bureaucracy issues and no border issues. You are in control of your money.
- Transparent – Because all info is stored on the blockchain, it is completely neutral and transparent. Nobody can manipulate it to their own ends and thus it is a trusted way of payment.
- Security – Unlike with credit cards, there is no need for banking or personal info to be linked to Bitcoin transactions, this preventing identity theft.
- Fees – There are no real fees for transactions, or in other words, you can actually choose the fees. The fee to send a million Bitcoins can be the same as for a single one.
The Block Chain
Bitcoin is a pretty complicated thing so bear with us here. When it comes to Bitcoin, the block chain is a very important aspect. The blockchain is a public ledger which records all Bitcoin transactions made. There is no central authority which makes these recordings. Instead, the maintenance of the block chain is done by a network of communication nodes which run Bitcoin software. The recordings in the Bitcoin ledger take the form of “payer X sends Y Bitcoins to payee Z”.
The block chain is actually a distributed database, which helps to achieve independent verification of the chain of ownership of all Bitcoins due to all nodes storing its own copy of the block chain. About six times per hour there is a new block created of all Bitcoin transactions, it is added to the chain, and published on all nodes. This allows software to keep track of all transactions, which is very important in order to prevent something called “double-spending”, which can happen when there is no central authority oversight. In essence, this block chain is the only place where this currency exists in terms of unspent outputs and transactions.
Mining – The Creation Of Bitcoins
Now, this is where it gets a little complicated. These things are created by a decentralised and highly competitive process known as “mining”. This, in essence, means that people are awarded Bitcoins for their services. These services include processing transactions and adding them to the blockchain and assisting in securing the network through special hardware. The reward for these actions comes in the form of new Bitcoins.
The reason this process is so competitive is because they are created at a fixed rate, so it becomes harder to make a profit as more people join the network. An interesting part about all of this is that Bitcoins are created at a fixed rate, with the rate being slashed in half every year until there are a maximum of 21 million in existence. This creates a whole lot of competition.
Bitcoin – Conclusion
The bottom line is that this is a great investment opportunity, the prices keep rising, and the advantages of using this type of cryptocurrency are unrivalled by any other payment form. Bitcoin is the way of the future. If you want to have secure way of making and recieving payments without putting your identity at risk, this is the way to go.
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