Whether you’re into technology, or just reading the newspapers, you must’ve heard about Bitcoin. It is a topic of a lot of articles nowadays because of how popular it is. It is also controversial because of a lot of unknown things surrounding its beginnings and the whole fuss about it now. You will soon realize it is not an extremely complex topic unless you’d really like to dedicate your life to it. So, don’t worry if you don’t know what exactly Bitcoin is, and where did it come from in 2019, because we’ll tell you about 10 things you must know about Bitcoin:
What exactly is a Bitcoin? Is it a new currency?
You should already be pretty familiar with currencies. Every country has its own, and it is obviously controlled by the government. It goes up or down in price depending on the country’s financial state, poverty level, and other circumstances. Well, Bitcoin is very, very similar, although it is a crypto-currency, which means it is not printed, or in form of metal coins. It is not centralized, which means no country or government has control over it.
That doesn’t mean the price is guaranteed or stationary. It goes down or up, and very quick. Both withdrawing, depositing, but also mining it can affect its cost. So, what is all this fuss about it in 2017? The price of Bitcoin skyrocketed this year, from about 700$ (for one Bitcoin) to about 18000$ (at the time of writing this article). A lot of people made a vast amount of money because they invested earlier, or really early. Although it gained its popularity in 2017, Bitcoin is actually about 10 years old!
Where did it come from? Who created it?
Evidence of Bitcoin existence can be traced to back in 2008. There’s a whole lot of unknown about it, which makes conspiracy theory an interesting thought. The creator of Bitcoin has gone by the pseudonym, Satoshi Nakamoto. That, of course, is not his real name. In fact, to this day it is unknown who exactly he is, with a few intriguing theories about individuals circling around the Internet. Nakamoto officially left the project back in 2010, after creating a proof of concept. Other developers picked it up and made it rise to this fame. In the end, you won’t really need to know who Satoshi really is or where he is from because Bitcoin isn’t centralized.
Bitcoin mining – physical work or not?
Surely, you just must have heard about Bitcoin mining, even if you don’t know what it is. Well, we’re going to give you a very simplified, but easy-to-understand explanation. First of all, mining doesn’t entail physical work, you don’t need to lift a finger in order to mine. What you do need is a special program for your PC or Mac X OS, which will connect you to a blockchain, or in other words, a workplace. You will use your PC resources, commonly your CPU and GPU, to solve a really complex mathematical task ahead.
The task is so complex that it will require a lot of resources. That’s why you’re not the only one mining (solving the equation). You’ll be joined by people around the world who are helping you, and you’ll be rewarded for your work in the end. Once the task has been completed, your reward will be, you guessed it, a fraction of Bitcoin. It is a fraction now, because the more people included, the less piece of a cake you get, which is logical. In the past, you probably would have gotten multiple Bitcoins as a reward, which was nearly worthless in the past.
First known successful transaction
The transaction actually dates back to May 22 of 2010. Be aware, Bitcoin was an unknown entity back then, and worth almost nothing. So, a programmer by a name of Laszlo Hanyecz was feeling hungry and decided to go for a pizza. He paid one pizza with 10,000 Bitcoins! Back in the day, that wasn’t much, and he was probably lucky to have that option. As of the moment of writing this article, 10,000 Bitcoins are worth 180 million US dollars! If he held on to them, he would be filthy rich, which is something we’ll talk about next.
Videos of guys giving advice and bragging about their wealth can be seen on popular video services. One guy borrowed money from his Grandma and invested, having heard of it from a friend. Fast forward to now, he’s earned enough money to live a comfortable life and re-invest some of the profit back into Bitcoin. Another one filmed and uploaded a video of him purchasing a Lamborghini only by Bitcoins. Needless to say, both he and his family benefited from him taking a risk a few years back.
Do you need to mine in order to get Bitcoin?
Absolutely not, mining is only one way of getting this crypto-currency. You can trade your native, country’s currency and convert it into Bitcoin. That way you can both keep your money safe, but also earn! Investing in this one is a big deal today, with prices jumping from about 700$ to nearly 18000$! Honestly, it is advised you start following the trend, and investing an amount of money you can afford to lose. In fact, there are about 800 more crypto-currencies on the market today, and you can follow their progress and invest.
Government seized Bitcoin, and it can be bought from them
In the hope that you’re not a criminal, and not using dark web for those purposes, you probably haven’t heard of Silk Road. That was a dark web website (not accessible by conventional browsers) intended for selling drugs and other illegal things. Important to realize, Bitcoin is the main currency for those purposes, as it can be hardly tracked. Well, FBI shut the website down back in 2013 and seized all the profits and users wallets. It is reported to have found about 144,000 Bitcoins in those wallets, which is about 2.60 billion $ of today’s worth! They organize auctions and sell them, and you can make quite a lot by bidding.
Where can you spend your hard-earned Bitcoin?
To be honest, in the past you couldn’t have done much. The only way would be to convert Bitcoin to your native currency and then use the money. But they would’ve taken a provision for doing that, and you would’ve lost a fraction of money every time. Nowadays, with it being so widespread, more and more services are accepting Bitcoin payments. You can use an app on your phone to pay in seconds in various restaurants, for example.
Some billionaires are against it, some are not
Warren Buffett, one of the most famous investors in the world today, is against it. He firmly said: “Stay away from it. It’s a mirage, basically”. A billionaire investor, Jamie Dimon, CEO of JPMorgan Chase shares the opinion. He said you can’t have a working environment where the currency is made of thin air. Sooner or later, the government will come down on it, or someone’s going to get killed over it. Not everyone is against it, for example, Mark Cuban and Richard Branson both speak optimistically about Bitcoin.
Famous people are in for a ride too
Cameron and Tyler Winklevoss are the twins that first became famous for suing Mark Zuckerberg, claiming he stole their idea for Facebook. Well, they were recently declared as the first Bitcoin billionaires, after buying about $11 million worth of Bitcoin back in 2013. Other famous celebrities are Gwyneth Paltrow, Ashton Kutcher (he’s an investor too if you didn’t know), and boxers like Floyd Mayweather. In conclusion, maybe you should jump on the crazy ride that Bitcoin is, it might pay off greatly!