Let us imagine, you have a teenage son/daughter who is studying finance. Or a blood relative who dabbles in financial work. Mention the word ‘bitcoin’ and their ears perk up. In short, bitcoin can be labeled as a currency but of the internet. In fact, it has gained name and fame even though it made its presence only before a decade. But where did the bitcoin originate? There are many questions galore. In this article, we have attempted a few of the most important questions regarding its history, how bitcoins gained fame and all.
Let us first know about cryptocurrency.
You must have heard the word ‘crypto.’ When you enter the password to the mail, it gets lodged in the specific server in cryptoformat. And a cryptocurrency, well, did you get the hint?
Yes, they are simple computer code lines, but they have monetary value. They are created by making use of electricity as well high performance computers. Since the money involves codes and lines, the other name for cyptocurrency is digital currency. It can be best understood if you can relate it to one form of money digitally created because of mathematical computations. The entire transactions are monitored by millions of workers known by the code name “miners.” So, you do not have any hard material or item to hold. But you can exchange your type of crypto for cash.
These miners can send the code lines for purchase. And by using cryptography, they can also control creation of new ‘bitcoins’, the term that is used to describe code. So, beginning from a decade, there may be hundreds and hundreds of bitcoins, but only some can become a worthy investment.
Bitcoins are traded over the internet and no Government of any country has control over these digital currencies. The main reason, it is a negative factor. But the same reason made bitcoins popular. Many of the bitcoins are designed with the market in mind, so in due course of time, the same code may not be recreated in the future. So, the particular coin may become more valuable.
Coming to the history of bitcoins, it was the first digital currency to be invented. Till today, there has been no perfect evidence of the creator of bitcoins. Except that it first made its appearance from a person known as Satoshi Nakamoto. But there has been no whereabouts about him in recent times. But his idea has diversified into a major fortune.
Since Bitcoin was the initial cryptocurrency, all the other digital currencies were given a single name. Altcoins or in full form, alternative coins. Some examples are Litecoin, Feathercoin, Ethereum, Peercoin and many coins are known by the name Altcoins.
Nature of Bitcoins
You can easily store bitcoin offline on your local hardware. This particular process is called as cold storage and it prevents theft and burglary. If you store the currency in the internet, then it can be stolen.
But if you lose the access to hardware containing the bitcoins, you will lose the currency forever. Till the present, it is estimated that nearly $30 billion worth value of bitcoins may have been misplaced or lost by investors as well miners. But, because of lack of information and popularity, it still remains as the number one cryptocurrency all over the world.
How Did Bitcoins Become Famous?
Bitcoins became a viral sensation only before half a decade. Persons indulging in criminal activities made these coins popular by buying a huge chunk as it does not have any regulations. So, their value went high.
If you are a bitcoin investor, you can lose all your money in scams. First, you do not have any solid evidence. Second, these accounts cannot be examined or frozen by tax men. In fact, the concept of bitcoins is beyond the control of any country law enforcement agency as well financial institutions.
How Do Bitcoins Deliver Value?
Since they are digital, you cannot store them in banks. So there is no storage. If you own a bitcoin, the best way is to purchase goods online. Or you can just store them in your database and hope the value increases in the years.
In fact, they also can be moved from a personal ‘wallet’ to another. In terms of definition, a wallet can be defined as a small database (personal) you can store in the laptop, tablet, or cloud.
In your lifetime, you must have got a fake currency note of any denomination. But this aspect is safe in case of bitcoins as counterfeiters cannot manipulate the system.
The value of a single bitcoin will differ daily, but there are places online to check the value. As of today, bitcoins’ value is millions of dollars.
But the value of a bitcoin resides in the coin and the entire process is not regulated. It is in fact run by miners. If you have bitcoins, they are not recognized in banks. In fact, they get transferred from one network to another within two individuals.
However, there are a few who tell that the bitcoin will also go through the dotcom bubble. But for others who are in the trade, bitcoin is a religion. Though there are several loopholes in the formation, storage and future of bitcoins, it has ensured the possibility of virtual currency and many more improvements.
Are you an entrepreneur having a home maintenance company that offers doorstep services for computers and laptops? Then you must have definitely heard about bitcoins and their advantages while attending business meetings.
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