Virtually one coin can make you a millionaire. The market value of a bitcoin crossed over $ 17000 last week. Speculators say that this rising trend will continue and the bubble will grow bigger for some more time before it would burst.
The charm of the coin could be judged by an example, which many people consider a fable. International media reported that Kristoffer Koch, a norwegian had invested $26 (about Rs. 1500/- in Indian currency) to buy 5000 bitcoins in 2009. It was not his conscience decision. He invested in bitcoins in the process of writing a thesis on encryptions. The insignificant investment slipped off his mind until the cryptocurrency gained media attention for its unprecedented valuation four years later. His $26 investment had become $886,000 by 2013; some where around Rs. 4.5 Crore in Indian Currency. At the current valuation of $17000 per bitcoin, Koch must be billionare.
BIT BY BIT
The origin
- Bitcoin is the most popular cryptocurrency that was created by a mysterious person or a group of persons known as satoshi Nakamoto.
- In 2008, he had circulated the original software in a white paper through mailing list and thus created a consensus network that enabled the bitcoin payment system.
- Bitcoin is the first decentralized peer to peer payment network that is powered by its users with no central authoritym bank or intermediaries.
Satoshi Nakamoto
- Apparently, Satoshi Nakamoto mined the first coins in 2009. It is estimated that his account contains about 980,000 bitcoins, worth about $15.2 billion.
- Satoshi left the project in late 2010, never to be found again.
Who owns it
- Bitcoin is an open source technology and no one owns the technology of the system
How it works
- Works like an app where one opens an account and pays money in flat currency to purchase bitcoins, which can be can be kept in a password protected digital wallet.
- The bitcoin network, however, records ever transaction in a public ledger called the 'Blockchain" .
- Bitcoin is not anonumous and taxmen can trace transactions with the help of tachnical experts.
Who can mine Bitcoins
- A technologically proficient and mathematical genius can mine bitcoins with the help of sophisticated computers.
- Miners use special softwares and hardwares to solve mathematical problems and are issued bitcoins in lieu of their services.
- Miners thus help in keeping the cryptocurrency network or blockchains stable and secure. They are paid in bitcoins to maintain the system.
Legitimacy
- Bitcoin has not been accepted as legal tender by any country and it is largely unregulated.
- Some countries such as the US, Canada and Japan are having a softer approach. India has not taken any stand on it.
- Countries like South Korea, Bolivia, Ecuador, Kyrgyzstan and Bangladesh have banned bitcoins.
- Bitcoins, seized in anti-corruption operations in Bulgaria, are worth $3.6 billion; enough to retire a fifth of the country's $16.5 billion debt.
- Ecommerce portals like Reddit, World press, Overstock and Amazon accept bitcoins.
- Traded at specific exchanges like Bitstamp, Coinbase, Bitfinex and Cryptsy.
- ATMS's exchanging bitcoins for dollars are located in cities like San Diego and Vancouver.
