In the past few years, a lot has been said about Bitcoin, the digital currency with no central authority. This subject became serious when investors started banking on Bitcoin becoming a relevant and usable currency online.
Bitcoin was developed in 2009 by developer Satoshi Nakamoto, although the actual developer has never been identified. Investigations have been made and this Japanese developer is probably not the actual founder of Bitcoin and it is believed more than one person worked on Bitcoin’s early development.
There is still a lot of questions about Bitcoin and if it can work as a real currency. Some websites have started accepting Bitcoin’s as a donation method, but we have yet to see real e-commerce deployment.
The online currency
Bitcoin has a maximum 2,100,000,000,000,000 Bitcoin elements, commonly measured in units of 100,000,000 known as BTC. It currently has a market cap of around $1.5 billion and is the world’s widest alternate currency.
The most ironic thing anyone has said regarding Bitcoin is it cannot be counted as real currency because it is not physical when most young people now trade all of their currency online with almost no physical form.
Bitcoin just takes it that one step further and eliminates the physical paper and metal. Trading can only be done online but with Bitcoin’s you can trade for physical items, although Bitcoin’s influence does not reach very far at the moment.
The company has no centralized state and operates through a peer-to-peer network. Due to Bitcoin’s very small load and processing time, it costs almost nothing to exchange through Bitcoin.
There is a limit to Bitcoin, which will happen in 2045 when 21 million BTC worth of coins are finally released to the world. Currently 1 BTC costs about $100, although this price will increase as Bitcoin becomes more relevant.
Getting Bitcoins
This is the part where the concept gets really tricky, you have probably heard of “Bitcoin mining,” the new way some entrepreneurs and investors are making money.
By sitting with an app open and providing the computational power to process transactions, the user will very slowly gain Bitcoins which will appear out of thin air – this is very slow, as in, one Bitcoin after 10000 accepted shares.
Of course, you can go the traditional route and buy Bitcoins – this may be a great investment like buying stock, Bitcoin is currently in a flux and could hit as high as $1000 before 2015.
Problems with Bitcoin
The main problem with Bitcoin is the lack of places accepting the currency. Currently, there are a lot of Bitcoin-related websites offering different purchases and you can pay your phone bill on some carriers in developing countries through Bitcoin.
However, for big organizations like Amazon, eBay, Xbox, iTunes, Netflix, and Dominos, it still is a little early to be testing this currency, especially when the price of the Bitcoin is forever changing.
For users wanting to trade from Bitcoin, it may be a little difficult when one day you have $250 BTC in the bank and the next day you have $20. You will have the same amount of BTC in the bank and the price for Bitcoin shops will be the same but the price elsewhere will change drastically.
Future of online currency
Many organizations, governments, and blogs have been quick to demise Bitcoin as a poor scam and a currency ready for the death bed.
There is a lot of the future in online currency, we believe. As people move away from paper and physical money to a fully online model, an online currency will become more accepted.
Think about it, when we get to the stage Starbucks and other organizations would rather you pay by credit card than cash, what will be the point of needing physical money?
As long as the organization is trusted who delivers the currency, it is very unlikely the money in your bank account will be lost, devoid of what currency it is in.
Bitcoin may become the advanced way to make exchanges over the Internet, there are advancements to be seen in Bitcoin, including having no central authority and near to no processing charges.
Over time we may even see an absolute idea come from someone else regarding fully online currency. Bitcoin is not good by any stretch of the imagination, it still has loopholes for scammers and has many doubters, but it is progress in the field.
