Welcome to our first feature of many on the history, meaning, worth and future of Bitcoin and all cryptocurrency in general. Our first feature on Bitcoin will be an introduction of sorts, so if you know absolutely nothing or you are a bitcoin trader, there will be something for everyone here! But if you do know all of the information pointed out here, then the coming entries in this series are guaranteed to impart some new information!
To begin with, some of you readers may still be asking yourselves, “what is bitcoin?” To give a description simply, I will allow the official Bitcoin website define it:
“Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.”
To simplify that even further, Bitcoin is a form of cryptocurrency, or digital currency, that operates independently from a centralized bank. To clear up any confusion that may arise, all Bitcoins are cryptocurrency, but not all forms of cryptocurrency are Bitcoins. Bitcoin is simply the first and most prominent, but there are many, MANY different forms of cryptocurrency, and there only seems to be more popping up every day! But that is another feature for another day.
Bitcoin began as a concept in 1998 on Internet mailing lists, which was based around the idea of creating currency free of a central authority regulating it. While the concept was first developed in 1998, it wouldn’t be realized for over a decade, when in 2009 the first true specifications and proof of concepts were published to the internet.
Bitcoins are “mined” through the use of software that users all over the world can download and run, in a modern-day form of the Gold Rush. We will go into more detail on how they are mined in the next feature, but for now, all you need to know is that users can acquire Bitcoins on computers, using an automated software on their computer. Anyone can do it, but there is no guarantee you will discover a Bitcoin.
Bitcoin started humbly, but in 2010 things began shifting; merchants began accepting the cryptocurrency, establishing it as a viable currency. In 2010, each Bitcoin was worth $.07, compared to the current worth in 2018, a shocking $11,681.72! That is quite the jump! To put it in perspective, one of the first few purchases made with Bitcoins was for an order of pizza, and today, the number of Bitcoins that were exchanged for that pizza are now valued at $100 Million! That had better have been the best pizza ever.
The first real mainstream coverage for Bitcoin came from less-than-savory avenues, namely, the Silk Road service in 2011. The Silk Road (named after the trade network connecting China and Europe) was an online marketplace for buying drugs, which used Bitcoins as payment due to the anonymity for the cryptocurrency due to no centralized regulation, it was quite literally buying drugs without a paper trail. It may not have been a fully legal use, but the makers of Bitcoin had no control over where the cryptocurrency was used, and like it or not, its use on the Silk Road legitimized cryptocurrency and proved that it is viable for marketplaces.
That is a good place to end todays feature on Bitcoins, and sets us up for our future features! Our next feature will go in-depth on how Bitcoins are mined and what users can do to get in on the action. If you have any questions about Bitcoin or have a specific element of Bitcoins (and cryptocurrency in general), please leave a comment down below!