Technology has helped us reach new frontiers. E-commerce has exponentially grown because of the advancement of technology. Is digital currency next in line for a huge growth? Bitcoin is a very popular topic of discussion among tech and economic peers. What makes Bitcoin a modern-day mystery and a ground-breaking innovation is that no one knows who actually created it, not many understand the process of how it works, and what its future will be.
What is Bitcoin?
Bitcoin is a cryptocurrency, which is a digital form of assets working as a medium of exchange. Cryptocurrency is accepted as a form of currency. There are few major companies like Overstock and eBay that accept Bitcoin as payment, because of its unknown not many major companies are currently accepting it as payment. Bitcoin isn’t the only type of cryptocurrency. There are several other cryptocurrencies which are Ethereum, Litecoin, Monero.
How does it work?
What makes Bitcoin so interesting is how it works. Imagine having a dollar in your pocket. Do you know where that dollar has been or where it came from? With Bitcoin, all of that information is available and closely monitored. Bitcoins exist on what is called a block chain. The block chain is a “file” or ledger of all the transactions where the Bitcoin has been. Imagine knowing where your dollar has been all the way from the printing press and being able to verify authentication. It’s a little more complex, Bitcoin essentially eliminates the middleman-which are banks-making it one of the reasons it is so controversial.
How did it start?
No one really knows who invented Bitcoin! Somebody using the alias Satoshi Nakamoto is credited with creating/mining the first Bitcoin in 2008. To this day the person has not been identified; some even believe it’s a group. Others have tried to take the credit of creating Bitcoin, but have been debunked. Other than a few clues here and there, not much is known of Satoshi Nakamoto. The algorithm Satoshi created only allows for 21 million bitcoins to be mined by the year 2140. Back in 2012 the price of Bitcoin was $12. As of today, it’s worth nearly $7000 per Bitcoin! The value is anticipated to only increase as time goes on.
Cons of Bitcoin
One of the biggest issues surrounding Bitcoin is that since it’s difficult to explain its origin and use, there’s a lot of mistrust and misinformation. There have been groups that create “savings and trust funds” with bitcoin and end up being Ponzi schemes or fake “wallets”. Wallets are mostly used to store, send and receive Bitcoins. Another factor is the intimidation of it. The method of sending and receiving isn’t complicated for savvy computer users, but for the average computer users all those numbers and letters attached to the bitcoin seems intimidating. The price of Bitcoin is volatile. Recently is has been an advantage for owners of Bitcoin because of the rise of the price. For more information, we recommend the very interesting Netflix documentary “Banking on Bitcoin.” What do you think of cryptocurrency? Do you think it’s the future of all commerce?