Bitcoin was released on the 9th of January 2009 and three days later when 1 Bitcoin was worth $0.06 the first transaction was placed between Satoshi Nakamoto and Hal Finney. Three years later, in early 2011 Bitcoin rose to parity with the Dollar and Satoshi Nakamoto the inventor, disappeared.
On the 16th of August 2016, 1 Bitcoin(BTC) is worth 569.33 US Dollar or 505.01 Euro and Satoshi is still nowhere to be found.
To see the opportunities Bitcoin offers and how to apply them, some understanding of how this innovation works is helpful. In this article I will explain what is Bitcoin and why I think it has the potential to continue gaining popularity.
Bitcoin, the Blockchain and Cryptocurrencies are revolutionzing the way we transact, you are at the right address.
What is Bitcoin?
Bitcoin is a method of exchange, to send and receive virtual coins, from the smallest Satoshi which is 100millionth of a Bitcoin to very large amounts. Online transactions can be securely executed between individuals operating independently of a central bank. The transfers are borderless, fast and considerably cheaper than current rates. There are currently over 300 ways to buy Bitcoin.
Satoshi’s unleashed the Blockchain Technology which is the main technical innovation behind Bitcoin. It is the public ledger for Bitcoin transactions. The Blockchain keeps a real-time record of all transactions on the network and is made available to all users.
The transactions are verified and the ledger is maintained by Miners. When blocks of data are verified by Miners then new Bitcoins are released to them as rewards for their efforts. As Bitcoin’s popularity grows Miners need huge computing power to verify transactions and keep the system updated. The limit to how many Bitcoins there can be circulation is 21 million. Today there are currently 15 387 375BTC in circulation.
For a more in depth explanation, Satoshi Nakamotos’s paper describes the Bitcoin Digital Currency.
Why it is Worth Knowing About Bitcoin.
Bitcoin, the first and most promising cryptocurrency uses the Blockchain software technology. The bitcoin/blockchain design has been the inspiration for other applications. Currently there 740 cryptocurencies that have sprung up since Bitcoin’s inception.
Most electronic spending systems require banks or a central system to authorise payments between individuals. Costly security systems and organisations are in place to prevent electronic fraud and theft. Blockchain effectively solves the problem of Double-spending. Double-spending is the result of successfully spending some money more than once. Bitcoin protects against double spending by verifying each transaction added to the entire Blockchain ledger to ensure that the inputs for the transaction had not previously already been spent.
Bitcoin is likely to become a global currency, accessed from a mobile phone. Micro-payments are not affected by high fees, they have no border constraints and transactions are completed within minutes. It has opened up wider possibilities for entrepreneurs from anywhere in the world to apply for a small business loan on Bitbond.
Although 2 of most significant Bitcoin exchanges Mt. Gox and Bitfininex we victims of hacking attacks and lost $460million and $60 million respectively, confidence in Bitcoin has remained.
As applications for Bitcoin grow its value will increase but you can be sure banks, governments and regulatory bodies taking a close look at the Blockchain technology.
As for Satoshi, he remains a mystery. Before withdrawing completely, he mined himself 1 million BTC and even with all the ups and downs Bitcoin has seen his stash is worth a cool $500 million.