Our ancestors must have been totally shocked if they’d had a chance to peep into our today. The era of self-driving cars, 3-D printings, social media, Internet of Things and numerous other inventions. In the chain of comprehension of complicated innovative developments, digital money occupies one of the leading places. The whole story of cryptocurrency starts with the well-known Bitcoin.
Some people believe that cryptocurrencies are a bubble, but one is not likely to say so after learning this subject deeper. Let’s unpack it to get a clear idea of what Bitcoin really is.
Therefore, Bitcoin is a new kind of money without a central bank or any other intermediaries. That is why to some extent cryptocurrency can be compared to freedom, while banking – to slavery. Physical bitcoins do not exist; it is just about the balances in the cloud, in other words, a form of electronic cash.
The fans of digital money rave about Satoshi Nakamoto, a pseudonymous developer of the first decentralized cryptocurrency – Bitcoin. The age of digital money started in 2009 when Satoshi released the first version of the bitcoin software. The purpose of Bitcoin was to create a new payment system that is powered by its users only.
The main principles of Bitcoin’s work are not that difficult and confusing, as it may seem for a new user at the very beginning. To start, users install a Bitcoin wallet on their computer or mobile and get the address, which is used for transferring money. Then one should understand that all transactions are verified by network nodes and done on the Internet only through a digital ledger whose name is blockchain. In simple words, Bitcoin is a software with a set of processes and protocols. It is created with the use of cryptography, the special technique of securing communications and information.
What concerns transactions within Bitcoin wallets, the last ones have a private key to sign transactions. That is a mathematical proof of the transaction to be made to the right wallet.
Then one gets to know the meaning of the word ‘mining’. It is a process that can be described by its two main functions: adding transactions to the blockchain digital ledger and releasing new currency. Crypto enthusiasts have a great way to join the cryptocurrency ecosystem with the help of mining. Although it is quite expensive and specific to start mining Bitcoin, it is still possible especially if you believe and trust in it.
If we look into the brief history of Bitcoin’s rises and falls, we will observe the changing dynamics of its value. Bitcoin started with the price only 3 cents (that is really difficult to believe now, but it certainly did!). In 2011 Bitcoin’s price hit about $32 and then fell to $2 causing a 94 percent drop. The huge falls in Bitcoin’s value also took place in 2013, a decline of 87%. What happened in 2017 struck all crypto fans; Bitcoin grew by fabulous 1,950% and the price reached its peak of nearly $20,000 per Bitcoin. Many critics called this phenomenon a price bubble, and in 2018, everyone could watch the crashing of Bitcoin to $3,500.
With all the ups and downs of the long history of the most influential digital money ever, the question is what to do now? The price for Bitcoin is around $8,000 and who knows what is to happen next. Bitcoin whales provide optimistic predictions for the future of the great money. They encourage the usage of digital assets instead of fiat currency. However, users can sincerely believe the true numbers only at the end of the day. The most bothering questions are still left: is it worth investing in Bitcoin, can it hit a million and can it substitute fiat one day. No matter what answers you give, we all should admit that the creation of Bitcoin is giving a lesson to humanity. Exploring unusual ways of financial approaches encourages constructing a real picture of what money really is.