We’ve all heard of it in recent years. It’s been praised as a new form of international currency, and that investing in it wisely can lead to wealth, and that is has given rise to completely new forms of trading. Bitcoin seemingly was the future of world economics, at least for a short while, and despite the fact that its value has dropped somewhat in the last few months, it’s still a powerful e-currency that has changed the online economic world in a number of ways.
Bitcoin isn’t a new concept, and, in fact, can be traced back to about a decade ago when the idea first sprang onto the online scene. At first, no one took Bitcoin too seriously – it was scene as a passing trend and nothing else. It would take several more years before a single Bitcoin was worth any real amount of money, but once it was, it had a snowball effect that can still be felt. The currency can be used for just about anything in today’s world, from hiring film, buying goods, and even in something more obscure like Aussie sports betting.
How Cryptocurrencies Started
Unlike national currency, which is often valued against a hedge of something physical, such as gold, cryptocurrency is instead nothing but a few lines of code on a computer. It’s a digital form of currency, in other words, and one that can be created through the power of mathematical equations and programming. The popularity that they enjoy today took some years to evolve, but their staying power was due to one, main factor: they weren’t controlled by governments.
Governments, in fact, have no hold at all over cryptocurrency, and have little say as to their value and their real-world, practical usage.
Bitcoin was the first of them, and appeared on the scene around 2009, long before they held any actual value. The man that first brought them to light, a programmer named Satoshi Nakamoto, has since disappeared and left behind a small fortune in Bitcoin value. One of the advantages of Bitcoin is its staying power. The currency can be saved offline on hardware. As long as that hardware remains in working condition, the Bitcoin are safe. The downside to this is that if the hardware fails, the Bitcoin are lost forever. It’s estimated that over $30 billion has been lost due to Bitcoin miners and owners losing them or having hardware breakdowns.
How Bitcoin Works
Essentially, a Bitcoin is created by a computer. Like computer games, it uses extremely complex programming and algorithms. However, the amount of hardware needed to create several Bitcoin in a short period of time is extremely costly. Once a Bitcoin has been created, it’s added to the creator’s wallet. A single Bitcoin holds a certain amount of value, and can be traded off for goods or money. At the moment, a single Bitcoin is often split into fractions due to the value of a single unit, meaning that investors will often invest into, say, 0.2 of a Bitcoin at any one time.
Although Bitcoin has seen some falling in value as of late, and other cryptocurrencies are currently more popular, there will always be a place for Bitcoin on the market.