(I wrote this for CFNewswire. One more article on cryptocurrencies and then it’s officially moving forward.)
Bitcoin, the current cryptocurrency frontrunner, holds the distinction of having close to a stateminted currency status. Ever since it burst onto the scene in 2008, the Bitcoin has seen the highest of highs and the lowest of lows. In 2013, its market value skyrocketed to billions of dollars. But in 2018, the Bitcoin’s value plummeted during what is now called the Great Crypto Crash. Amid all uncertainty, the Bitcoin proved its resilience, bouncing back amid all the uncertainty. At present, it now holds a value of more than $5000.
What it is
Before going into what a Bitcoin is, there are some things to understand first, the first being cryptocurrency. Cryptocurrency is a digital or virtual currency which can be used as a medium of exchange. Unlike state-minted currencies such as the Philippine Peso or the US Dollar, a cryptocurrency is free from external controls such as government and bank regulations. It runs on an independent distributed database called a blockchain network.
A Bitcoin is essentially a cryptocurrency. It is decentralized digital currency that can be traded, swapped, or exchanged. There is already a growing number of companies that recognize Bitcoin payments.
How it works
Bitcoin, just like any cryptocurrency, runs on unique cryptography that makes it impossible to duplicate or recreate. An important thing to note is that there is a finite supply of Bitcoins – 21 million to be exact. About 16.7 million Bitcoins are still available for circulation but that number can go lower because of different things such as lost keys or hard drive failure. It is projected that by 2140, all Bitcoins will have been circulated.
One can gain bitcoins without having to pay for them. This is through Bitcoin mining. Bitcoin mining requires the use of specialized computers which solve complex mathematical problems in order to chain blocks of transactions together (blockchain). Miners basically ensure the blockchain’s security every time there is a Bitcoin transaction. As payment, miners are paid with Bitcoins and other transaction fees.
Bitcoin mining can be an expensive enterprise. Good thing there are other ways to get hold of this cryptocurrency without having to go through that route. This includes payment, completing tasks online, and trading.
Despite all the doubts mostly coming from naysayers, Bitcoin continues to be a force to reckon with. And as more and more buy into the whole blockchain tech idea, cryptocurrencies, with Bitcoin leading the pack, increasingly look like the future.