Bitcoin is a currency not issued by any country. No bank holds it. It is NOT backed by any institution. No coins (or bills) even denote it.
Bitcoin is actually a cryptocurrency. That means that it is entirely virtual and there is no physical manifestation of the currency. Amazingly, its value is determined wholly by the Market and it is transacted almost exclusively online.
Bitcoin has been mostly a curiosity for many since its inception on the Dark Web in 2009. And, its been a mystery to many more. After all, can a currency that exists purely online even be real?
Bitcoin’s value is very real. It recently surged to well above $10,000 USD per coin – a phenomenal increase from where it started. One financial analyst at Saxo Bank predicts its value could hit $100,000 USD in just ten years. At the same time, Bitcoin’s value can fluctuate wildly so it isn’t for the faint-hearted!
How exactly does cryptocurrency work?
- selling goods and services,
- purchasing it via a Bitcoin exchange or private seller, or
- by ‘mining’ it.
Unlike a traditional currency, Bitcoin is not run by a centralized entity. Instead, it relies on computers provided by Bitcoin miners to perform and validate its transactions. These computers are the distributed computational “machinery” of the system. And, the miners are paid in Bitcoin from transaction fees and newly minted currency.
Bitcoins are kept in individual online “wallets”. Owners can receive, store, and send bitcoins to other wallet owners. Only its owner has a secure private key to each wallet. And while the wallet is private, every Bitcoin transaction is logged in an encrypted, yet public blockchain. By maintaining multiple copies of these blockchains, counterfeit or illegal transactions are almost impossible.
You can get wallets for free many places online. Users must establish financial credentials and possibly link their normal bank accounts for convenience. But, there is normally no charge to make these arrangements.
Affordability. Convenience. Security. Fees are almost nonexistent compared to banks and credit cards. Also, transactions can be conducted instantly across international jurisdictions. There’s no risk of a third party seizing the funds!
A lot of the Bitcoin community is still anonymous making it hard to know exactly who is using the currency. One study finds that the average user is 33 years old and lives in the United States. Interestingly, this user base has changed dramatically from its early Dark Web online roots. Bitcoin’s popularity continues to grow within its core users but recently it has gone far beyond. Because of its recent tremendous increase in value, Bitcoin and all of the cryptocurrencies have become an investors dream. Cryptocurrency is a “hot” commodity in more volatile economies such as Venezuela, Nigeria, and even South Korea. Remember, where political situations make investment very tricky. Bitcoin and its other cryptocurrency cousins provide a solid “safe haven” for investors.
Are cryptocurrencies having a significant effect on the global economy? After all, it’s available in every part in the world. This new technology/currency is being used to conduct business globally by people everywhere. Bitcoin advocates argue that it will become the de-facto standard for international trade because it is secure, can’t be counterfeited, and can scale according to demand. We’ll see!
It IS highly speculative! There is a lot of risk! But, with that risk comes a simply fantastic upside. Because Bitcoin is a financial phenomenon that comes along rarely in one’s lifetime, you should consider this carefully! Sign up here to mine Bitcoin and not only will you get a FREE stake to start, and earn even faster signing up others. You can gradually accrue more and more Bitcoin using your computer’s power while you are not online. And, soon you’ll find a pleasant surprise in your Bitcoin wallet!