Bitcoin has been around for quite a while. It started in 2009 and was a new type of money that a lot of countries just went with really quickly. There were lots of international businesses that wanted to be able to move money without the oversight of having to make sure they didn’t go over the $10,000.00 limit (which the banks would really watch). And yes, some of the people who wanted to do this has nefarious reasons for it. But, a lot of the people were big corporations who didn’t want to wait around for the time that it took banks to take care of their transactions.
For example, I once took a large amount of money from one account and put it into my personal account. I had to wait 10 days for MY money!! That was very agravating and because I was making sure I was covering some bills . So, Bitcoin and crypto-currency was a way to fix this problem.
Bitcoin is cryptocurrency. It is entirely virtual. Transacted almost exclusively online, it exists only in digital form. The market determines the value.
Watch this video. It came out in 2014 and is a pretty good explanation.
Since its inception in 2009, Bitcoin has gone up a lot in price (value). But, not that many people knew abut it, because most of us use the good old dollar. This was something that was going on internationally and being used by the large corporations, but not by us regular people.
If Bitcoin is basically virtual currency, how can it be real?
In fact, its value is very real. It recently surged to well above $17,000 USD – more than doubling its value in one year. Financial analyists are predicting it to be over one million dollars relatively quickly. At the same time, its value can fluctuate wildly. In December, for example, it took a dive of more than $1000 in just one day, going from $17,631.00 on December 7th to $15,944.00 the next day. However, it has done that before. It just keeps going back up. After all, on January 2013, it was only worth $13.00. How do you like that change in value? From $13 in 1/2017 to $15,944 just four years later.
So how exactly does Bitcoin work?
Thus as explained above, Bitcoin can be obtained either by
- selling goods and services,
- purchasing it via Bitcoin exchange or private seller, or
- ‘mining’ it.
Because the currency is not centralized, it relies on computers provided by Bitcoin miners to perform and validate its transactions. It is the Bitcoin miners who provide the computational machinery. They are then compensated in the actual currency, from transaction fees and newly minted Bitcoin currency.
So, what do I do with it, once I’ve got it?
Bitcoins are kept in individual online “wallets”. These wallets enable us to receive, store, and send bitcoins to other wallet owners. Each wallet has an address and its owner has a private key. The neat thing though is that while your wallet money is safe from hacking, every Bitcoin transaction is logged in a blockchain. A blockchain is a public record of every Bitcoin transaction.
So What. So, it’s public. What does that mean?
It means, the blockchain cannot be hacked. There is no central server where all your information is stored, like Uber, or Wells Fargo, or Target. No, the transactions are so transparent (and if you want to learn more about that, look at the page on this site about Blockchain) that your money (virtual, but it still spends and goes up in value) is more safe than in a bank. So, what’s not to like? Affordability. Convenience. And security. Compared to banks and credit cards, transaction fees are almost nonexistent. Buyers and sellers can conduct transactions instantly across international jurisdictions. And, there’s no risk of the funds being seized by a third party.
Who then, is using bitcoin now?
It’s actually hard to say, because much of the Bitcoin community remains anonymous and widespread. The average user is 33 years old and lives in the United States according to one study. Even so, while there is a committed group of core users, Bitcoin’s popularity continues to grow. Especially among more volatile economies such as Venezuela, Nigeria, and even South Korea.
So how is it impacting the Global Economy?
You ask, is Bitcoin having a significant effect on the economy? Yes. It’s available in every part in the world. It is giving everyone the potential to buy and sell goods and services on a global scale. Bitcoin has become the de facto standard for international trade. There are many more crypto-currencies starting to be offered, but Bitcoin is the standard (and has the highest value) This is due to the fact that Bitcoin was the first, and right now, the most stabl