You have probably at some point in your internet browsing history come across an article or website referencing “Bitcoin”. You may have even noticed that a lot of legitimate companies are accepting Bitcoin (TigerDirect, Experida, Dell and Tesla to just name a few). So what the heck is Bitcoin, where did it come from and what’s it worth?
What the heck it is Bitcoin? Bitcoin is a form of digital currency held, like a file would be, on your computer or smart device. Unlike nation states or banks, no centralized entity controls Bitcoin, we do. Unlike printed currency, Bitcoins are produced and monitored by people called “miners”. Miners are people all over the world that run the Bitcoin software which not only gives birth to Bitcoins but also legitimizes and perpetuates the Bitcoin system. Bitcoin’s software is a publicly accessible system that allows people to view and share the “block chain” (Bitcoin’s general ledger). Because the block chain can be downloaded and accessed on any computer, the payment processing and record-keeping for Bitcoin is done in a widely distributed way that allows for a public monitoring of all transactions. These transaction’s show up as traceable code that allows any person tech-savvy enough to see and trace the history of every Bitcoin from start to where it currently sits. Because bitcoins are not associated to a person, SSN or address Bitcoins remain mostly anonymous, you can merely know that the Bitcoin exists and that userXaB5ZGlD got it from userG4RA!D$7d.
Ok, so how much is Bitcoin worth and where did it come from? Bitcoin’s value fluctuates but currently a single Bitcoins is worth approximately $700. Bitcoin has been valued as low a 0.08c and as high as $1250 but what doesn’t fluctuate is the amount of Bitcoins that will end up in circulation. Satoshi Nakamoto designed Bitcoin in 2008 to start with a large influx of Bitcoins and to then dwindle exponentially over time. When miners first started working the bitcoin software, they were rewarded with 50 bitcoins. Now solving Bitcoin’s algorithms will get you only 25 bitcoins. The bitcoin FAQ estimates that the final bitcoin will be mined in the year 2140, bringing the permanent Bitcoin circulation to just under 21 million (currently, there are roughly 12.4 million bitcoins in the world). There have been many instances of hackers stealing Bitcoin wallets and many governments, including Germany and China, are moving towards regulation and a regulated exchange but as of now the system is in the hands of the people.
So what is Bitcoin? Bitcoin is a crypto-currency created in 2008 that has garnered mainstream acceptance. For how long that will be agreed upon and to what end is anyone’s guess.
